Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

ORKNEY COUNTY COUNCIL BILL

BRITISH WATERWAYS BILL

GREATER LONDON COUNCIL (MONEY) BILL

Lords amendments agreed to.

MERSEYSIDE METROPOLITAN RAILWAY BILL

Order for consideration read.

To be considered upon Tuesday next.

Oral Answers to Questions — EDUCATION AND SCIENCE

Colleges of Education

Mr. Skeet: asked the Secretary of State for Education and Science whether he will make a statement of Government policy on the reductions at present being made in the number of colleges of education.

The Minister of State, Department of Education and Science (Mr. Gerry Fowler): As I said in the House on 2nd April—[Vol. 871, c. 1068–69]—the Government are proceeding to develop more general purpose higher education institutions, by mergers of colleges and polytechnics and other means, as advocated in the White Paper "Education: A Framework for Expansion" (Cmnd. 5174) and in Circular 7/73. So far, few final decisions have been taken about the futures of individual institutions. However, the future of some 80 to 90 of the 163 colleges has been agreed or is well on the way to agreement, and there are

prospects of a fairly early solution in the case of another 20 to 30 colleges. The future role of the remainder is still unclear at the present time.

Mr. Skeet: Is the hon. Gentleman aware that in Bedford the Bedford College of Education, Bedford College of Physical Education and Mander College of Further Education will be regrouped? Will not this lead to an extinction of their identity? Can the hon. Gentleman see any advantage, economic or social, in driving these three schools together?

Mr. Fowler: Yes, Sir. In accordance with the policy advocated by the previous Government, I see every advantage in bringing together colleges of education to form larger, diversified and more viable institutions. In adding further education institutions to many of them to spread that diversification, as the hon. Member for Chelmsford (Mr. St. John-Stevas) suggested in January of this year, there is every educational advantage.

Mr. McNamara: While I do not disagree with my hon. Friend's enunciation of the policy of the present Government and the previous Government, may I ask him to bear in mind the peculiar and sensitive situation of the voluntary education colleges, which in many local communities have a specially revered place? Will my hon. Friend bear in mind in particular that they have great financial and other problems, not least for the lay staff teaching in them, who have all the problems of any person becoming redundant—mortgage problems, the seeking of suitable similar jobs and so on?

Mr. Fowler: We are very conscious of the place of the voluntary colleges in our system, and we are taking due and, I hope, sensitive account of this as the exercise proceeds. I hope that few staff will become redundant nationally. But I should remind the House that with the approval of the Association of Teachers in Colleges and Departments of Education we have agreed on very favourable arrangements for redundancy where it is imperative and unavoidabdle that some staff should become redundant.

Mr. Beith: Does the Minister recognise how deeply it is resented in the education world that he will not disclose to the House details of his proposals at a time when his Department is sending


out closure proposals to individual colleges? In particular, does he not recognise how deeply it is resented in Alnwick College of Education that its contribution, particularly in connection with mature students and adventurous programmes, is about to be stopped by his Department.

Mr. Fowler: I think that the hon. Gentleman misunderstands the procedure. My Department is not issuing closure proposals. It has no standing or right to do so. The proposals come from the local education authorities. My Department considers them and advises the local education authorities, as it has done in the case of Bedfordshire and Alnwick. That advice is not necessarily accepted by the LEA's, but in my view it is normally sound advice.

Mr. St. John-Stevas: Does the hon. Gentleman realise that while we on the Opposition benches accept the need to reduce the number of places devoted to teacher training in colleges of education what we object to is the insensitive and authoritarian way in which he is carrying out this policy? Will he give instructions to the officials in his Department to take full account of the legitimate objections and grievances of individual colleges and see that they are not being ridden over roughshod?

Mr. Fowler: I can give the House an assurance that no individual college has been ridden over roughshod. I am in full control of what is happening on this front. We are taking a most sensitive attitude to what is proceeding. I remind the hon. Gentleman of what he said on 4th January:
There is general recognition that many colleges of education must combine forces with other institutions if they are to prosper in the new situation.
The hon. Gentleman cannot say one thing in government and another in opposition.

Oral Answers to Questions — Burnham Committees

Miss Fookes: asked the Secretary of State for Education and Science if he is prepared to make a review of the composition of the Burnham Committee.

Mr. Marten: asked the Secretary of State for Education and Science what

representations he has received about the composition of the Burnham Committee.

The Secretary of State for Education and Science (Mr. Reg Prentice): I have received applications from three teacher organisations for seats on the Burnham Committees and I have recently made some changes in the representation on the management panels. I have no plans for a general review.

Miss Fookes: Will the right hon. Gentleman show a sympathetic view to the Union of Women Teachers? It has a substantial membership and is well worth being represented on the Burnham Committee.

Mr. Prentice: I have informed the Union of Women Teachers that I have no plans to add it to the members of the teachers' panel. It seems that the general advice that I received from the teachers' unions generally was correct in that the interests of career women teachers are adequately represented on the teachers' panel at present. I understand that the local authority associations and the teachers' associations represented on Burnham intend to have further discussions on their views on the future representation on Burnham. No doubt the hon. Lady will be made aware of those discussions in due course.

Mr. Crawshaw: Is my right hon. Friend aware that many thousands of teachers have no direct representation on the Burnham Committee and that those who are seeking representation are not wishing to gain it at the expense of those already on the committee? If initiative is to be taken, where has it to come from. If we are to wait for those already on the committee to take such an initiative we shall never get any changes. Surely the initiative should come from my right hon. Friend. He must realise that many people have a legal claim to representation.

Mr. Prentice: The situation is complicated, and has been for many years, by the fact that there are many teachers' organisations. My personal view is that I wish there were fewer. Given the present situation, I see the next stage as being discussions between the local authority associations and the teachers' associations. I do not close my mind


for ever to some reform that I might initiate, but I have no immediate proposals for any reform.

Mr. Marten: Will the right hon. Gentleman be slightly more forthcoming. and educate the House, including myself, as to whether he has the power to alter the composition of the main Burnham Committee? He must be aware that there is widespread dissatisfaction throughout many teachers' organisations about the present representation, which seems to be dominated by the National Union of Teachers.

Mr. Prentice: I have the power to bring before Parliament orders to alter membership. As I recall, the statute states that to take an organisation off the Burnham Committee I should need to lay such an order. I did that recently, in relation to the management side, with reference to the Association of Education Committees and the ILEA. I think that an alteration of numbers would not require that procedure.

Mr. Flannery: Is my right hon. Friend aware that on the Burnham Committee—I was a member of it—all teachers are very amply represented and that the word "dominated" is a complete misnomer? Is he aware that the interests of every branch of the teaching profession are at present quite reasonably catered for on the Burnham Committee?

Mr. Prentice: My impression is that the interests of teachers generally are represented vigorously and with ability within the framework of the Burnham Committee.

Mr. St. John-Stevas: May I draw the Secretary of State's attention to the claims of the Association of Polytechnic Teachers to be represented on the further education panel of the Burnham Committee? In view of the widespread concern that is expressed among teachers and also in the House about the composition of the Burnham Committee, will the right hon. Gentleman take the initiative himself and appoint an inquiry of an impartial nature into the structure of this body with a view to reforming it and making it more representative?

Mr. Prentice: I understand that the Association of Polytechnic Teachers has a membership of only just over 3,000 out

of a total teaching force of over 60,000 in further education and of 13,600 in the polytechnics. That seems to be a strong reason for not giving the association representation. On the more general point that the hon. Gentleman has raised, I think it would be wiser to await the outcome of discussions, to which I have referred, between local authority associations and teachers' associations.

Oral Answers to Questions — Secondary School Management Committees

Mr. Cryer: asked the Secretary of State for Education and Science if he will seek powers to require local authorities to institute management committees with representatives of staff and students in secondary schools.

The Under-Secretary of State for Education and Science (Mr. Ernest Armstrong): No, Sir. The Education Act 1944 already requires that every secondary school shall have a governing body, but the constitution of such a body in the case of a county school is a matter for the local education authority. There is nothing in law or present practice to prevent local education authorities from revising their county school instruments to permit the appointment of representatives of staff and senior pupils.

Mr. Cryer: Does my hon. Friend accept that my Question was about the internal organisation of schools and not about external management through boards of governers? Does he accept that management committees would harness the wealth of ideas and talents possessed by teachers and students, that they would help to erode the rigidly hierarchical systems which now exist in schools and that they would be of practical benefit since they would give experience of democratic decision-making within schools?

Mr. Armstrong: My Department is anxious to have the further involvement of parents, teachers and pupils in the running of schools. We are reviewing every aspect of the matter. Even an enlightened Department of Education and Science cannot impose democracy. This is a matter for discussion at local level.

Oral Answers to Questions — London Allowance

Mr. Christopher Price: asked the Secretary of State for Education and Science whether he will now increase the


global sum available to the Burnham Committee in the negotiations for the London allowance.

Mr. William Hamilton: asked the Secretary of State for Education and Science what responses he has received from teachers' organisations concerning the proposed London weighting allowances; and if he will make a statement.

Mr. Prentice: It is for the management panel of the Burnham Committee to negotiate with the teachers' panel. As my right hon. Friend the Secretary of State for Employment has indicated, public service employers will be responding to claims in the light of their particular circumstances. I met representatives of the teachers' panel of the Burnham Primary and Secondary Committee on 9th July, noted that the offer made by the management panel was in accordance with the Pay Board report and reminded them that there were two sides to negotiations.

Mr. Price: Is my hon. Friend aware that the Burnham negotiations are dominated by the global sum which he and the Government impose on the management panel? Has he seen some of the recent settlements by the banks and other organisations in the private sector in London going well above the Pay Board norm? In view of his responsibilities to maintain the fabric of a full-time and efficient teaching force in London, does he feel that he has responsibility to create some movement of the global sum so that we can get a settlement in London before the inevitable disruption which will otherwise take place as term beings in September?

Mr. Prentice: I have noted what my hon. Friend said about the banks and other employers. I believe that the whole country is directly or by implication involved in the social contract and I do not believe that employers such as banks should now be making movements of that kind. My hon. Friend, with all his experience, will not expect me to make a unilateral statement on the position of Burnham on behalf of the management panel. Any move made in negotiations would have to be discussed within the management panel, on which the local authorities as well as my Department are represented.

Mr. Sims: Is my right hon. Friend aware that teachers living in outer London constituencies such as mine believe that their living expenses are just as high as those living in inner London and that they deplore any distinction being made between inner and outer London? Will he take this into account?

Mr. Prentice: I am aware of that point of view. It has been put to me rather forcibly by representations from the teachers' organisations. On the other hand, I think that there was a great deal of merit in the argument for a two-tier solution. Without anticipating the question of my hon. Friend the Member for Watford (Mr. Tuck), I believe that the problem to which he may draw attention may lend force to that pant of the argument.

Mr. Hamilton: I have a vested interest in this matter because my son and daughter-in-law, both teachers, are in the outer London area. The Pay Board's recommendation will do nothing for their housing problem and nothing, I suspect, to solve the housing problems of thousands of other teachers in both the outer and inner London areas. It is this which seems to many of us to be the main point. Will my right hon. Friend undertake not only to look at the global sum but also to consult local housing authorities to see what they can do to help teachers to be housed?

Mr. Prentice: The Pay Board recognised that very severe difficulty is imposed on people in London who are buying their first home. It suggested that measures should be taken to try to deal with the problem. It went on to say, rightly, that the pay of all public employees in London could not be raised to such an extent as to compensate fully the first-home buyer.

Oral Answers to Questions — Local Allowances

Mr. Raphael Tuck: asked the Secretary of State for Education and Science if he will now give further consideration to granting a local allowance to teachers in areas such as Watford.

Mr. Prentice: This is a matter for the Burnham Committee.

Mr. Tuck: Does my right hon. Friend realise that unless something is done


about this the result will be an educational green belt—or perhaps I should call it an educational black belt—around London, with schools closing for lack of teachers, children getting half-time education, increasing illiteracy and classroom chaos? What factors govern the pay boundaries set for different groups of public sector employees? For example, the workers at the town hall in Watford get a local weighting allowance while teachers in Watford do not.

Mr. Prentice: My hon. Friend's supplementary question underlines the point wherever boundaries are drawn for this purpose there are bound to be anomalies, grievances and problems among those who live on the wrong side of the line. Those who are urging that there should be a bigger award of the London allowance for teachers should be aware that in the last two weeks I have had representations from teachers in Kent and Berkshire against an over-generous settlement of the London allowance because of the kind of problem to which my hon. Friend has referred.

Mr. Wells: Cannot the right hon. Gentleman look far more sympathetically at the housing problem than his earlier reply indicated? It is not only a matter of private sector housing. Council flats for spinster and young bachelor teachers are desperately needed. All local authorities, whether they be county and education or borough and housing, have a common purpose in this, and for the right hon. Gentleman to shovel it off saying that it is a matter for the Burnham Committee is unrealistic.

Mr. Prentice: I did not say that the housing problem was a matter for the Burnham Committee. I said that the problem raised by my hon. Friend the Member for Watford (Mr. Tuck) was for Burnham. The Pay Board has recommended that there should be a further look at the housing problem, and this is a matter for central and local government. Some local authorities are making special housing provision for their teachers, and I would like to see that extended. But those of us representing London constituencies recognise that there are already long waiting lists in London, and therefore the problem of the teachers is part of a larger housing problem which is not capable of easy solution.

Oral Answers to Questions — School Leaving Age

Mr. Nigel Lawson: asked the Secretary of State for Education and Science what recent representations he has had from teachers about the problems which have arisen in certain schools following the raising of the school leaving age.

Mr. Prentice: I have had a number of letters from teachers and teachers' associations on various aspects of the raising of the school leaving age, and others have been passed on to me by hon. Members.

Mr. Lawson: Is the right hon. Gentleman aware that I too have had a very large number of letters on the subject from responsible teachers throughout the country following my recent motion on this subject? They all drew attention to this problem and asked that something be done to modify the existing law. Will the right hon. Gentleman not merely undertake to have a full inquiry into this matter in the light of experience but also consult the teachers themselves directly and not through the National Union of Teachers, which is not altogether representative of teachers' views on this subject.

Mr. Prentice: I think that we have to distinguish between the narrower point of whether there should be an optional early leaving date in the summer—which is a matter we have under discussion and on which we have sought the views of all the teachers' organisations, not only the NUT, and of local authorities and others concerned—and the wider question raised by the hon. Gentleman in the debate of 8th July, when I thought that he was effectively answered by hon. Members on both sides of the House who preferred to keep to the policy of all parties that the school leaving age should remain at 16 and that all young people are entitled to five years of secondary education.

Mr. Flannery: Is my right hon. Friend aware that every educational advance ever made has produced its range of critics, that every Education Act has brought forth all sorts of condemnation and that every time the school leaving age has been raised there have been critics? Is he further aware that great good is bound to flow to children and young adults in school from the raising


of the school leaving age, not merely to 16 but, I hope, one day even to 17 and over?

Mr. Prentice: I agree with my hon. Friend's point of view. From my contacts in many secondary schools in recent months the impression I have been given, both by pupils and by teachers, is that the vast majority of those spending the extra year at school, and who would have left voluntarily had it not been for the change, are behaving well, are not indulging in large-scale truancy, are not disrupting school life and are reaping genuine benefit by the extra year.

Mr. St. John-Stevas: While keeping the principle of the school leaving age at 16, will the right hon. Gentleman take early steps to make it more flexible in practice, first by enabling children at 15 to take up apprenticeships and courses of technical training, and secondly by enabling children to leave school directly after they have taken their CSE or other appropriate examination, because no good is done to anyone by keeping children hanging on at school in these circumstances?

Mr. Prentice: The second point raised by the hon. Gentleman is a matter on which, as I have said, we have been obtaining opinions from the local authorities and the teachers' associations and others concerned, and we will be studying them with a view to deciding whether some adjustment of the summer leaving date would be justified. I do not agree with the hon. Gentleman on the more general point he raised. Whether they go into apprenticeships or otherwise when they leave school, it must be generally recognised that these young people are entitled to five years of secondary education. We should not be defeatist about this at the end of only one year of the raising of the school leaving age.

Mr. Edwin Wainwright: Will my right hon. Friend take into account that it is not just a question of boys and girls staying at school until the age of 16 but probably also a question of what we are teaching them during that extra period? When my right hon. Friend is looking forward, will he take into account the advances which science has made over the last 30 years and those which may come into being over the next 30 years in considering what kind of education we

are to give our young people to help them to live in that kind of society?

Mr. Prentice: My hon. Friend is right in saying that we have to look forward to the kind of world these young people will have to live in and the situations which they will face well into the next century. We must recognise against that background that they are entitled, all of them, to five years of secondary education. A great deal of excellent work is being done in the curricula in many schools, and bodies such as the Schools Council are stimulating new thought and new methods for the curricula. A great deal has been and is being learnt, and I would welcome comment about the content of curricula in order that we may take the greatest possible advantage of new thought and new methods, to the greatest possible benefit of the children.

Mrs. Kellett-Bowman: Is the right hon. Gentleman aware that there has been a radical change of mind on this matter among many teachers in secondary schools? Many of those who were most fanatically in favour of raising the school leaving age now find themselves most deeply handicapped by it. Is the right hon. Gentleman further aware that many older pupils have told me that they would have been happy to stay on as volunteers but did not wish to be press-ganged into doing so, and that this had altered their whole attitude?

Mr. Prentice: I have visited a number of schools in socially-deprived areas which have many difficulties. Teachers have told me their problems. The majority have said that they still believe in the raising of the school leaving age and believe that they are achieving something worth while among the children staying on. I ask the hon. Lady not to generalise always from the worst examples and loudest complaints from a small minority but to consider the whole picture. If she did, she would come to a different conclusion.

Oral Answers to Questions — Higher Education (Oil and Gas Technology)

Mr. Pardoe: asked the Secretary of State for Education and Science what provisions and estimates his Department has made for the demands that United Kingdom oil and gas development will


make upon higher education establishments for which he is responsible over the next 10 years.

Mr. Gerry Fowler: Existing and proposed provision for courses in higher education relevant to oil and gas development is listed in a working party report on "Education and Training for Offshore Development". I am sending the hon. Member a copy. In consequence of one of the report's recommendations, the University Grants Committee has made special additional grants to three universities for the development of postgraduate courses in petroleum engineering and geology.

Mr. Pardoe: I thank the Minister for that reply and for the document which he intends to send me. Is he aware that the availability of places in further education for the study of oil and gas technology falls far short of the forecasts for qualified technologists who will be needed if the North Sea oil and gas industry develops? Is he now satisfied that his new proposal and the proposals of the University Grants Committee will fill the gap?

Mr. Fowler: No, Sir. I share the hon. Gentleman's anxiety that the education system should respond quickly to the needs of the oil and gas industry and I encourage it to do so. The Petroleum Industry Training Board is making a projection of manpower requirements for the future and my Department is closely associated with these developments.

Oral Answers to Questions — Pupil Costs

Mr. Ashton: asked the Secretary of State for Education and Science whether he will state the average cost of educating a child in a rural area compared with educating a similar child in a city.

Mr. Armstrong: I regret that this information is not available.

Mr. Ashton: Is my hon. Friend aware that it is a good thing for him to try to arrive at this information? Does he realise that many parents in rural areas who protest loudly and at length about the rates do not seem to realise what it costs to take a child to school beyond the three-mile limit? Does he agree that the position ought to be explained to more ratepayers in rural areas so that they can ascertain the difference in the

cost of educating their children and children in cities?

Mr. Armstrong: I want to be helpful to my hon. Friend, but there is no easy method of distinguishing between urban and rural parts of counties. Statistics from the Chartered Institute of Public Finance and Accountancy for 1972–73 show that county boroughs spent an average of £131 per primary pupil while counties spent £134. But counties often include sizeable urban areas, so that comparisons are unreliable and meaningless.

Oral Answers to Questions — Arts Council

Mr. Hannam: asked the Secretary of State for Education and Science if he will make an additional grant to the Arts Council this year to meet the impact of inflation.

The Under-Secretary of State for Education and Science (Mr. Hugh Jenkins): The grant to the council already includes an element for inflation. In addition the £750,000 supplementary grant announced on 25th June in answer to my right hon. Friend the Member for Vauxhall (Mr. Strauss) which relates to 1973–74 and to VAT will enable the council to help a number of its clients.

Mr. Hannam: Is the hon. Gentleman aware of the grave financial difficulties facing the art world, especially music, the theatre and the film industry? When will he carry out his promise, given during the last General Election campaign in his eight-point programme for the arts, that he would give the Arts Council £20 million a year?

Mr. Jenkins: I expressed the view at that time that £20 million was a reasonable figure for the Arts Council grant and I still have that view. In my discussions with Treasury colleagues it is necessary for me to walk a middle path between being properly persistent on the one hand and not becoming a persistent pest on the other.

Mrs. Dunwoody: Will my hon. Friend, far from giving more money to the Arts Council, take good care, particularly in relation to the film industry, to see that he gets value for the money already given? He has increased the grant considerably. Does he not agree that while the work of the Arts Council is admirable


there is an indication in some cases that the grant is almost too lavish?

Mr. Jenkins: My hon. Friend will be aware that the Arts Council does not receive aid in relation to the film industry. A grant is made to the British Film Institute rather than to the Arts Council. There is no indication that the grant is too lavish. If my hon. Friend has specific information of cases in which she feels that the grant has been lavishly expended, I shall be interested to receive particulars.

Mr. Money: Does the hon. Gentleman recall that in a Written Answer on 6th May he specifically said that he would provide for this special subject by means of consultations with his colleagues? What consultations has he had with his colleagues and what practical differences have those discussions made to the arts?

Mr. Jenkins: I have had considerable consultations with my colleagues and I fear that they get a little tired of seeing me. As a consequence of the consultations, the current grant to the Arts Council for 1974–75 includes an inflation factor of 11 per cent. and a real growth factor of about 3 per cent. I would have thought that, although in an imperfect world perfection has not been reached, we have not done badly.

Mr. Moonman: Is my hon. Friend aware that despite the mood behind some previous questions many people in the arts world and many hon. Members on this side of the House think that he is doing a first-class job? Will he ensure with regard to allocation of resources that whatever happens the regions will not suffer in any way?

Mr. Jenkins: I am grateful to my hon. Friend for his remarks. We are taking special care for the regions and in a number of cases, of which I hope to give details shortly, we should be able to show that we are particularly endeavouring to push out from London towards the regions to give them every possible help.

Oral Answers to Questions — University Meetings (Freedom of Speech)

Mr. Dixon: asked the Secretary of State for Education and Science what is his current policy about addressing meetings at universities in view of the ban on freedom of speech by the National Union of Students.

Mr. Prentice: I will consider invitations to speak from student organisations which have clearly dissociated themselves from the National Union of Students' ban.

Mr. Dixon: I welcome the continued robust attitude of the right hon. Gentleman, but can he say what advice he has given to his colleagues in the Cabinet on this point?

Mr. Prentice: A number of my right hon. and hon. Friends have come to similar decisions and have told me so, while others may have done so privately without telling me. It is not for me to advise my right hon. or hon. Friends, or any other citizens, which speaking invitations they should accept.

Mr. Frank Allaun: Will my right hon. Friend bear in mind that there is a great difference between tolerance for extreme Right-wing opinion, which should be allowed, and tolerance for racialism, which is a quite different matter?

Mr. Prentice: I took the opportunity to make clear in a letter—which I published—which I sent to the President of the NUS that I was diametrically opposed to the extreme Right-wing organisations and that I abhorred racialism. I also stated to him—I believe that on this I carry most hon. Members with me, including my hon. Friend—that we should respect the right of people to state views, regardless of whether we share those views or strongly disagree with them.

Mrs. Knight: Will the right hon. Gentleman ignore the ridiculous contribution from his hon. Friend the Member for Salford, East (Mr. Allaun) and recognise that in many circumstances the fact of senior Members of Parliament on the Government side refusing to address organisations which close their minds to the other side of the argument operates an effective sanction which can only be for the well-being of the universities concerned?

Mr. Prentice: I hope that the decision announced by a number of people—not only politicians but others—that they will not speak to some students' unions and that they dissociate themselves from the NUS ban will have some effect in helping other students' unions to change their policy. A number of individual students' unions have done so and have dissociated


themselves from the NUS ban. I hope that others will take the same decision.

Mr. Bryan Davies: Does not my right hon. Friend agree that it is time we stopped this sanctimonious criticism of the NUS? Is it not the case that Her Majesty's Ministers and leading members of the Opposition Front Bench speak from time to time to a whole range of organisations of people with whom they differ greatly in attitude? Is it not clear that the way to tackle what many of us on this side of the House regard as the erroneous position of the NUS on this issue is to refute the matter in open debate in the universities?

Mr. Prentice: I do not think anyone will accuse me of sanctimonious attacks on the NUS. I regard myself as a friend of the NUS. It has on occasions been good enough to reciprocate that sentiment. However, on this particular issue the NUS has, I believe, gone down the wrong road and I thought it right to make a personal decision on the matter as many others have done.

Mr. St. John-Stevas: I fully support the Secretary of State in his personal stand on this matter, but is it not also essential that moderate students should get the opportunity of hearing moderate speakers? Will he take steps to publish in the OFFICIAL REPORT a list of those unions which have responded to the deprivation of his oratory—bearing in mind that on all matters save, unfortunately, education, he has reasonable views—so that hon. Members can know whether it is right to follow his example in particular cases?

Mr. Prentice: I am glad the hon. Member thinks that I have reasonable views. I am sorry that I cannot reciprocate the compliment. As for publishing a list of certain student unions, I do not have that information available and I do not think it would be right for anyone to seek such information. It is for the student unions to run their own affairs. It is not for us to compile lists. If I receive an invitation to speak to a students' union, I inquire from those issuing the invitation what is the attitude of the union to the ban.

Oral Answers to Questions — EEC Countries

Sir A. Meyer: asked the Secretary of State for Education and Science what

consultations he has had with the Ministers of Education of the other member States of the European Community.

Mr. Gerry Fowler: My right hon. Friend attended a Council and Conference of Ministers of Education in Luxembourg on 6th June last. The main subjects discussed by the Ministers were the mutual recognition of diplomas and cooperation in education within the nine member States.

Sir A. Meyer: Is it not a fact that progress in this body has been so disappointing as to amount to practically nothing? Since the only saving grace of the Labour Party is a commitment to the brotherhood of man and international good will may I ask whether the Government will seek to instil some kind of activity into this comatose body so that children in our schools are no longer taught the kind of pernicious jingoistic nonsense about "British oil" or worse still, "Scottish oil"?

Mr. Fowler: I share the basic attitude expressed by my hon. brother on the benches opposite. There are many important matters before the Council of Ministers. The mutual recognition of degrees and diplomas is perhaps the most pressing. I regard it as unfortunate from an internationalist point of view that further progress has not been made to this date, not only within the Community but within the wider international community.

Mr. Tom Ellis: Is my hon. Friend aware that exchange visits within Europe involving many more school-children than at present would be welcomed by many progressively minded people in this country? May I ask him to seek to establish, in collaboration with his European colleagues, permanent machinery to encourage and facilitate this development?

Mr. Fowler: I too would welcome such a development but I would go further than my hon. Friend and say that it should not be simply on a European basis.

Mr. William Shelton: May I ask whether the Secretary of State's colleagues took the opportunity of pointing


out to him that certainly in West Germany and France, instead of moving towards abolition of selection those countries are moving much more towards continuous selection throughout a child's time at school? Did the Secretary of State take the opportunity of discussing with his colleagues practical means whereby more parental choice and parental rights could be introduced into our schools?

Mr. Fowler: We must recognise that pernicious and irrational views about education are not peculiar to Tory Members. They may rear their ugly heads in other countries too.

Oral Answers to Questions — Secondary Education (Advisory Council)

Mr. Willey: asked the Secretary of State for Education and Science whether he will appoint the Central Advisory Council for Education to advise him on the education of boys and girls between the ages of 11 and 16 years.

Mr. Prentice: I have no present intention to do so.

Mr. Willey: Is my right hon. Friend aware that I am discouraged to find that he has joined his immediate predecessors in flouting the spirit and letter of the Education Act? Apart from that, does he not feel that, now the school leaving age has been raised, this is an opportune time to supplement the Crowther and Newsom Reports with an embracing review of secondary education between the ages of 11 and 16?

Mr. Prentice: There are enough problems in secondary education which we have studied in a number of different ways. There is for example the question of the curriculum for those staying on further at school. I think that the best central focus for this is the Schools Council, which is doing an excellent job. This is a better way of doing it than asking the Advisory Council to make a report on it.

Mr. Marks: Is my right hon. Friend aware that one of the problems of this age group in schools is that they do not get a fair share of the teachers available and that there is far too high a concentration of teachers in the sixth form? Is he aware that 10 per cent. of the teach-

ing groups in sixth forms consist of only one pupil? Is not this unfair to the remainder of the school? Will my right hon. Friend examine this problem?

Mr. Prentice: I should like to consider this and discuss it with my hon. Friend. Inevitably there is a different ratio in the sixth form. The main answer to this must lie in an improvement of teacher supply generally. I am glad to say that as at present advised we are expecting from the next school year an additional 20,000 teachers as against 100,000 extra pupils. That should lead to an improvement in the ratio. I am sure that my hon. Friend's point will be taken into account by local authorities.

Oral Answers to Questions — NORWAY

Mr. Ashton: asked the Prime Minister whether he will seek to pay an official visit to Norway.

The Prime Minister (Mr. Harold Wilson): I have at present no plans to visit Norway but I was able to have useful talks with the Norwegian Prime Minister at the anniversary meeting of the North Atlantic Council in Brussels on 26th June and when he came to the meeting of the Socialist International at Chequers on 29th and 30th June.

Mr. Ashton: Will my right hon. Friend have further talks with the Norwegian Prime Minister about Statoil? Is he aware that the Norwegians are getting very much tougher with private enterprise than anything proposed in our White Paper? Is he further aware that some of us feel that any incoming Tory Government in years to come could reverse the Labour Government's proposal with only one Budget? Why does not my right hon. Friend insist on taking over the whole of the industry instead of only 51 per cent.? Would it not have been disastrous if we had taken up only 51 per cent. of the coal and electricity industries?

The Prime Minister: I am not concerned, and I do not think anyone else is, with the very remote hypothetical possibility mentioned by my hon. Friend. As for the question about Statoil, we are well aware of the practices developed with great success by the Norwegian Government. We have largely followed


them. My hon. Friend will have seen the suggested provision in the White Paper of a hydrocarbons organisation which can develop its activities.

Mr. Grylls: If the Prime Minister goes to Norway, will he consider travelling on to Sweden where he would soon discover that the pharmaceutical industry has been partially nationalised and that costs and prices have risen? Will he consider the effect in Britain if he were to nationalise our pharmaceutical industry, when we would have fewer new medicines and fewer innovations?

The Prime Minister: The Question is about Norway and not Sweden. Since, however, the hon. Gentleman has suggested that I extend the visit I was not proposing to make I will say that the extent of the rapacious behaviour of the pharmaceutical industry was demonstrated by a report of the Monopolies Commission made to the previous Government.

Mr. Douglas Henderson: May I ask the right hon. Gentleman, when eventually he visits Norway, to find out why the rate of unemployment there is 0·4 per cent., one-tenth of the rate in Scotland? Is he aware that he may find out that the answer lies in the fact that Norway is not controlled from London whereas Scotland is?

The Prime Minister: I am prepared to look at that interesting reasoning. There is another reason of course: Norway has had a Labour Government for several years. The thing on which we can perhaps all agree is that Norway has got further and faster ahead with the exploitation of North Sea oil resources than we have. When we catch up—I am sure the hon. Gentleman will appreciate what we are doing—particularly in the affected areas of Scotland the unemployment rate, which is already falling will be comparable with that of Norway.

Mr. Mayhew: Would not the suggested visit enable the Prime Minister to meet some of those great Socialist leaders who have been members of coalition Governments—distinguished Socialist leaders who not only preach power-sharing to other people but actually practise it themselves?

The Prime Minister: Yes, Sir. They practise it with unfortunate results, as those Socialist leaders will inform me and have informed me. I should also be able, with the enthusiasm of the hon. Gentleman, to inquire of the Democratic Socialist leader of Norway what happened to his referendum.

Oral Answers to Questions — COAL INDUSTRY (MINISTER'S SPEECH)

Mr. Edwin Wainwright: asked the Prime Minister if the public speech on the coal mining industry made by the Secretary of State for Energy, at the National Union of Mineworkers' conference in Llandudno on the 4th July 1974 represents Government policy.

The Prime Minister: Yes, Sir.

Mr. Wainwright: During that speech my right hon. Friend mentioned an inquiry into the coal mining industry. Will the Prime Minister take into account that the wages and conditions in the industry are not attracting young people into it? My right hon. Friend also spoke of compensation for pneumoconiosis sufferers. Will the Prime Minister do something about that quickly and not be indifferent as were the Conservative Government? Unless we do something about it, shall we not be placing hundreds of thousands of pounds into the hands of the legal profession? Furthermore, will the Prime Minister take into account that many pneumoconiosis sufferers have died and left their widows in penury? Will he promise to do something for them as well?

The Prime Minister: We announced in our manifesto an examination of the future of the industry, and my right hon. Friend has proceeded with this examination with the two sides of industry with remarkable speed and great thoroughness. The Government were able to announce in the House the results of that examination.
On the question of wages and conditions, what happened last winter and earlier this year led to a substantial reduction in the chronic wastage and the return of many miners to the pits. I cannot anticipate further negotiations, which are a matter for the industry.
Pneumoconiosis has plagued the industry for a century but was scheduled only during the war. My hon. Friend will be aware that my right hon. Friend the Secretary of State for Energy has informed the mining industry that we are prepared now to reach a once-for-all solution of the problem, not only of those who may in future—a diminishing number we hope—be discharged from the industry with pneumoconiosis, but all past sufferers. The exact details are being worked out between my right hon. Friend and the industry. As I am sure my hon. Friend will confirm, this is greatly appreciated and understood by the industry as dealing with a problem which has existed for many years for thousands of families in his constituency and mine.

Mr. Hannam: Does the Prime Minister agree that there must be a relationship between the large public funds being invested in the coal industry and productivity and output, which have gone into decline during the last year? Does he appreciate that without this there will be a decline in the industry's capacity to satisfy demand for generating power and sharp increases in the price of coal during the years to come?

The Prime Minister: Productivity in the coal industry has been affected by the great falling-off in development in the last year or two because of the shortage of miners for reasons which were debated before and during the General Election. It will take some time to catch up with the development work lost during that period. The hon. Gentleman will have noted, I am sure with satisfaction, the announcement within the industry that it is trying to work out an effective form of productivity agreement.

Oral Answers to Questions — NATIONAL UNITY (MINISTER'S SPEECH)

Mr. Hurd: asked the Prime Minister whether the public speech on national unity by the Secretary of State for Trade on 6th July at Plymouth represented the policy of Her Majesty's Government.

The Prime Minister: Yes, Sir.

Mr. Hurd: In that speech the Secretary of State spoke of the deep sense of fore-

boding in Britain today—and many of us would agree with that. How does the Prime Minister hope to dispel that foreboding when group after group, such as the radiologists, are damaging our schools, hospitals and community services because they have been taught by the Labour Party that bludgeoning the community is the only way in which they can press their case?

The Prime Minister: The hon. Gentleman has no warrant for the statement with which he ended his supplementary question. It is a fact that the transition from stage 1 to stage 2 and stage 3 ossified the economy and created great grievances and anomalies. I understood that the hon. Gentleman supported that policy. As a result there are great difficulties which particularly affect a large number of white collar unions, particularly white collar unions in the public services. They feel, rightly or wrongly, most aggrieved by what has happened in the past. I have never seen a sense of foreboding more dramatically illustrated than in the faces of Opposition Members yesterday.

Mr. Torney: Does my right hon. Friend agree that the problems of radiologists, nurses and others have arisen largely because their wages and conditions of service were neglected during the four years when the Conservative Party was in power? Does he further agree that the hon. Member for Mid-Oxon (Mr. Hurd) seems to have a bad memory of Conservative policy?

The Prime Minister: There is a great deal in the diagnosis presented to the House by my hon. Friend in his supplementary question. As the House is aware, I hope shortly to meet representatives of the principal organisations in the National Health Service, which are concerned about the future of the service, quite apart from wages. This is a problem which has lasted for a number of years and it was reinforced by the decisions of the Conservative Chancellor of the Exchequer last December with which we are still contending, but much less was said about those decisions in public comment last December than has been said during the past month.

Oral Answers to Questions — REFERENDA

Mr. Stanley: asked the Prime Minister what is Her Majesty's Government's policy towards the holding of referenda on matters of national importance.

The Prime Minister: This is a wholly exceptional procedure, justified in the special case of the previous Government's Northern Ireland (Border Poll) Act 1972 and our Northern Ireland Act 1974, and as one of two alternative means of fulfilling the Government's pledge to give the British people through the ballot box the final decision about Britain's position in relation to the European Economic Community.

Mr. Stanley: If the Prime Minister decides to hold his consultative referendum on the EEC, will he tell the House clearly whether he would or would not regard the result of that referendum as being binding on the members of his Government?

The Prime Minister: I have said all along that there are two means. However, if the decision of the British people was recorded through the ballot box, yes, Sir, I would regard that as the final decision of the British people.

Mr. Faulds: Once the voice and the vote of the British people have ensconced Britain firmly in Europe, what devious and anti-parliamentary device does my right hon. Friend think the anti-Europeanists will then think up to get us out again?

The Prime Minister: I am grateful to my hon. Friend for presenting the issue so starkly. Depending on the progress of renegotiations, the vote of the British people might go the other way. [HON. MEMBERS: "Which way?"] I am sure that my hon. Friend, equally in accordance with the spirit of what he said, will accept the decision of the British people and not seek any devious means of changing it.

Sir Frederic Bennett: I have a point of order to raise on this Question, Mr. Speaker. Should I raise it at the end of Questions?

Mr. Speaker: Yes.

Later—

Sir Frederic Bennett: On a point of order, Mr. Speaker. During the last fortnight I have tabled no fewer than 14 or 15 Questions to the Prime Minister on the subject of referenda. Those Questions have been transferred, but I make no complaint about that. The serious point I wish to raise is that the Questions I tabled to the Prime Minister last week were exactly the same as Question No. Q4 today, except for the use of the phrase
…what are the criteria adopted by Her Majesty's Government in the holding of referenda".
The Prime Minister, as was his right transferred that Question to the Home Secretary for answer yesterday. I have not yet had the answer to it but I am told that the Question has been answered. May I have guidance whether it is proper for the Prime Minister, when the wording of two Questions is identical, to get another Minister to answer one of them the day before and then to answer the same Question a day later, thus preventing other hon. Members being given a chance to put a supplementary question to the Prime Minister?

The Prime Minister: Further to that point of order, Mr. Speaker. The question of transfers is a difficult one. Some of the Questions tabled on referenda were Questions on subjects which are better dealt with by the responsible departmental Minister, particularly as the supplementary questions obviously would be of a departmental character. The general issue of legislation on referenda is a matter for the Home Secretary. I answered the Question today because of the deep interest shown in this matter by the House in an exchange last week.

Sir Frederic Bennett: Further to that point of order, Mr. Speaker. I must press this matter. The Prime Minister referred to questions of a departmental character. I have already said that I have no objection to the Prime Minister taking the action he did in that respect. I am making the point that, because of the deep interest in the House on this subject expressed in the House both yesterday and last week, it is somewhat unusual that the Prime Minister declined to answer a Question yesterday but


answered a Question in identical terms today.

Mr. Speaker: The hon. Gentleman's point will be noted.

Oral Answers to Questions — BATTERED WIVES AND CHILDREN

Mr. William Hamilton: asked the Prime Minister if he will now consider the establishment of a Royal Commission to consider the extent and nature of the problems of battered wives and children.

The Prime Minister: As my hon. Friend will be aware, my right hon. Friend the Lord President of the Council recently agreed to set up a Select Committee in the autumn, and in my view this will provide the best means of inquiring into this very human problem. In these circumstances, therefore, I do not propose to recommend a Royal Commission for the purpose.

Mr. Hamilton: Is my right hon. Friend aware that some of us are very disturbed that the Secretary of State for Social Services has indicated that she does not see the link between battered wives and battered babies, although there is an intimate link between the two? Will my right hon. Friend give a firm undertaking that the terms of reference of the Select Committee will link the two and will enable the Committee to have access to all the papers in the Department indicating the extent of the problem and the proposals that are recommended for its solution?

The Prime Minister: Yes, Sir. The House knows how deep an interest my hon. Friend and other hon. Members have taken in this question. That is one reason why I think that it should be dealt with urgently and not by a Royal Commission. We all know and have read of cases in which the ill treatment of wives and the ill treatment of children have been linked. They are not always linked. That is a matter on which more research is needed. The terms of reference of the Select Committee will enable it to look into all questions, linked and unlinked, of family tragedies of that kind.

Mr. Moonman: I am sure my right hon. Friend will be aware that what has been said will give great satisfaction to many people and will clear the air in

view of the confusion that arose last week. Is he aware that of the 25,000 cases involving battered wives something like 60 per cent. show the linkage to which he has referred?

The Prime Minister: Yes, Sir. I do not want to prejudge the inquiry which the Select Committee will undertake. A great deal of work has been done by a number of dedicated organisations and individuals; their work will be available. The figures mentioned by my hon. Friend will be available for examination. There is probably no single cause, as one knows from one's constituency and other problems, but it is important that where there is a linkage it should be established, and also that the problem of the battering of wives and the battering of children separately, for whatever psychological reason, must be examined.

BUSINESS OF THE HOUSE

The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): With permission, Mr. Speaker, I should like to make a short Business Statement.

The business for Wednesday, Thursday and Friday has been rearranged as follows:

WEDNESDAY, 24TH JULY—Supply (13th Allotted Day): conclusion of the debate on the economic situation, when there will be an Opposition motion before the House.

Consideration of Lords amendments to the Housing Bill.

THURSDAY, 25TH JULY—Supply (14th Allotted Day): the question will be put on all outstanding Votes.

Afterwards, a debate on a motion for the Adjournment on public safety and the decline in respect for the law.

Motion on passes for Members, &c.

Consideration of Lords amendments to the Housing (Scotland) Bill.

FRIDAY, 26TH JULY—Remaining stages of the Road Traffic Bill [Lords].

Motion on the Electricity (Borrowing Powers) Order 1974.

Second Reading of the Education (Awards and Grants) Bill.

Proceedings on the Solicitors Bill [Lords], the Friendly Societies Bill [Lords], and the Insurance Companies Bill [Lords], which are consolidation measures.

Mr. Emery: Although the House will be considering the Lords Amendments to the Housing Bill tomorrow evening, their Lordships will not be considering those amendments until tomorrow afternoon. I do not know the exact number of amendments concerned, but they comprise a document almost an inch thick. Will the right hon. Gentleman ensure that those amendments are properly marshalled and available to Members so that the House may deal with them properly and efficiently?

Mr. Short: Yes, Sir, the amendments will be available. They will be received from the Lords tomorrow and taken into consideration forthwith. They will be available to hon. Members in this House.

Mr. Emery: Since the Lords are not considering the amendments until tomorrow afternoon, how will they be received in this House by tomorrow?

Mr. Short: We hope that the amendments will be received by about 8 o'clock. There are a large number, but I understand they are not controversial.

Mr. McNamara: What progress is being made on the Hare Coursing Bill, which was tabled for discussion on Friday?

Mr. Short: In view of representations made during business questions last week and the number of representations which I have received since then, I am seeking a fresh opportunity for a debate on the Second Reading of that Bill next week.

Mr. Adley: Is the right hon. Gentleman aware that this morning in the Standing Committee on the Channel Tunnel Bill the Minister in charge said that he had no knowledge of the statement widely reported in the Press at the weekend, purporting to come from the talks between the Prime Minister and the President of France, about delay in the timetable on the Channel Tunnel project? Bearing in mind the great problems which many thousands of householders are suffering, will the right hon. Gentleman before the end of this week ask his right hon. Friend the Prime Minister, or the Secretary of State for the Environment,

to make a statement to the House so that we may know what is going on?

Mr. Short: I am answerable for many things, but not for statements in the Press. I shall certainly look at what the hon. Gentleman said.

Sir Harmar Nichols: May I inquire about the debate on public safety and the decline in respect for the law scheduled for Thursday? Will that debate be wide enough for the House to express the overwhelming feeling in the country for a return of capital punishment for certain happenings which are taking place and which are truly disturbing the country?

Mr. Short: The motion was selected by the Conservative Front Bench.

Mr. Patrick Mayhew: Will the right hon. Gentleman say what has happened to a publication, now of antiquarian interest, known as HANSARD. When may we next expect to see it?

Mr. Short: We are doing our best with HANSARD.

Sir Anthony Royle: In view of the deep concern felt by hundreds and thousands of people living around London Airport as a result of the decision by the Government to cancel the plan to build an airport at Maplin, will the right hon. Gentleman provide an opportunity for the House to debate this serious situation which is affecting so many people in the London area?

Mr. Short: No, Sir. I cannot give time for that. There will be opportunities on the Consolidated Fund Bill.

WOMEN (STATUS)

The Secretary of State for the Home Department (Mr. Roy Jenkins): I will, with permission, Mr. Speaker, make a statement on the Government's proposals for securing equal status for women and give a brief outline of my proposals for a sex discrimination Bill. These will be set out at greater length in the White Paper which I intend to publish in a few weeks' time.
The Bill will apply to employment, education, housing, the provision of goods, facilities and services to the public, and to related advertising.
Discrimination on grounds of sex or marriage will be made unlawful in employment, training and related areas. The Bill will complement the Equal Pay Act. It will be comprehensive, subject to some limited exceptions—such as employment in private households, and, at least initially, small firms, as well as a few carefully defined instances where sex is a genuine occupational qualification for a particular job. The Bill will apply to employment agencies and training organisations, employers' organisations, trade unions, professional associations, and bodies issuing licences connected with employment. Existing protective legislation, contained mainly in the Factories Act 1961, will be retained for the time being but will be kept under review.
In education, the Bill will lay a duty on educational authorities in both the public and private sectors to provide facilities for eduction to either sex of the like quality, in the like manner and on the like terms in and on which they are provided for members of the other sex. There will, however, be a saving for single-sex educational institutions. Complaints relating to the maintained sector of education will be dealt with in the first instance by the education Ministers.
The Bill will also make it unlawful to discriminate in the provision to the public of goods, services and facilities, the main exception being where such services and facilities are clearly designed for one sex.
The Bill will not cover fields dealt with in separate legislation, such as social security and pensions.
Effective enforcement is essential. The Bill will provide individual civil remedies for victims of unlawful discrimination and will also make provision for dealing with general practices of discrimination. Employment complaints will be considered by industrial tribunals, which will also be dealing with related issues arising under the Equal Pay Act; other complaints will go to specially designated county courts in England and Wales and to the sheriff courts in Scotland. The number of women appointed to tribunals will be increased.
The Government propose to set up a powerful Equal Opportunities Commission with responsibility for enforcing the law in the public interest on behalf of the community as a whole. The

commission will be able to represent individuals in suitable and significant cases but its main rôle will be strategic: to identify and deal with discriminatory practices by industries, firms or institutions. It will be empowered to issue non-discrimination notices, which could if breached be enforced through the civil courts, as well as to follow up court and tribunal proceedings. It will also be able to conduct general inquiries and research, to advise the Government, and to take action to educate and persuade public opinion. The commission will have adequate powers to require the production of relevant information.
Consultations will be undertaken with interested parties on the basis of this statement and of the White Paper.
These proposals go well beyond those put forward by the previous Government as regards both scope and enforcement. They are founded on the principles outlined in the Labour Party Green Paper. They take account of the findings of the two Select Committees which considered Private Members' Bills introduced into this House and another place, the practical experience of the operation of the race relations legislation, the recommendations of the Street Committee, and the views of many organisations and individuals.
I have tried to avoid a number of the weaknesses which have been revealed in the enforcement provisions of the race relations legislation. Sex and race discrimination will be dealt with separately at this stage, but my ultimate aim is to harmonise, and possibly to amalgamate, the powers and procedures for dealing with both forms of discrimination.

Sir K. Joseph: The Opposition welcome the general purposes of the right hon. Gentleman's statement. Will he accept that my right hon. and hon. Friends and I are concerned for the legitimate rights of women and had a substantial record of achievement in women's interests when we were in Government? Is the right hon. Gentleman aware that we also stand by every word in our proposals in our document "Equal Opportunities for Men and Women" and are particularly anxious to see equality of educational and professional opportunity and the ending of


groundless and discriminating requirements in connection with credit and the like?
Is the right hon. Gentleman aware, further, that we note with some relish and amusement that, after all her fuss, the Secretary of State for Social Services is not even present on the Treasury Bench and that pensions and social security are specifically excluded from the Government's proposals?
Is the right hon. Gentleman also aware that, although the Opposition will study the Government's White Paper with care, we totally deny that the proposals which he has announced go any further than was contained in our document?
I have four questions to put to the right hon. Gentleman. Precisely where do his proposals go further than those of the previous administration? What size of firm does he have it in mind to exempt? Why have the Government dropped the tax credit proposals, which would have helped women, especially working women, far more than any of the proposals in his statement?
Is the right hon. Gentleman aware, finally, that we oppose absolutely any attempt to foist any further excessive pressure on business and employers, beleaguered already—crippled already—by the attack on confidence and liquidity by the right hon. Gentleman and his right hon. and hon. Friends?

Mr. Jenkins: I note the right hon. Gentleman's very general welcome for the proposals which I intend to bring forward. I note also that he stands by every word of what he said in the White Paper that his Government published However, this goes a good deal further. I do not object to what the right hon. Gentleman said. I object to its inadequacy of scope.
I regret what the right hon. Gentleman said about my right hon. Friend the Secretary of State for Social Services. The Opposition Front Bench is not so notably full this afternoon. I thought that it was unreasonable of the right hon. Gentleman to have made any such comment.
He asked me where our proposals went further than those of the previous administration. I begin by giving one specific example to which, curiously

enough, he referred as being of great importance but which was hardly dealt with in his proposals. I refer, of course, to education. Our proposals go significantly further in education. They go significantly further in dealing with a whole range of credit and financial facilities. The powers of enforcement are much greater and therefore will produce an effective scheme.
As for the size of firm which will be exempted, I do not wish to be tied to specific figures, but I have in mind in the first instance the small firm with about 10 employees, or something of that sort.
As for the tax credit proposals, I said in my statement that anything to do with taxation matters dealt with by separate legislation would be so dealt with and that I did not intend to cover them.
In the right hon. Gentleman's final question, he tried to link this with some general, wide-ranging economic theory. I hope and believe that there is no connection between confidence in business and industry and the desire in certain limited numbers of businesses, if it exists, to prevent women from having adequate facilities for promotion and for playing a worthwhile rôle in industry.

Dr. Winstanley: Is the Home Secretary aware that he could not have found a more appropriate place in which to appeal for the equal status of women than this House, in which the secretaries of hon. Members have no status and in which many are employed as labour-only subcontractors? Is the right hon. Gentleman aware, further, that the disproportionately small number of women Members is eloquent testimony to the degree to which women are discriminated against? Will the right hon. Gentleman accept that what is needed is not so much changes in the law as changes in the minds and hearts of men?

Mr. Jenkins: I note what the hon. Gentleman has said. None the less, I think that the proposed Equal Opportunities Commission will not devote too much of its time to investigating the processes of selection committees in the Liberal Party.
I agree with the latter part of the hon. Gentleman's question. To end discrimination of any sort requires, to an even greater extent than changes in the law,


changes in the hearts and minds of men and no doubt of women, too. But I believe that in this and in other respects the law can play an important part, the though by no means the only part, and the also can help to build up a climate of opinion which can create changes of the kind to which the hon. Gentleman rightly referred.

Mr. William Hamilton: Is my right hon. Friend aware that my guess is that every women's organisation in the country will welcome his statement, it being far more ambitious than the wishy-washy announcements that we had from the Tory Party after thwarting successive Bills in this House? Can my right hon. Friend say whether the proposed Equal Opportunities Commission will have regional offices? It is very important for the aggrieved person or persons to have access to the commission and, accordingly, to have regional offices in Scotland, Wales and elsewhere. Will my right hon. Friend also say whether the aggrieved individual will have access to considerable damages if his grievance is not satisfied?

Mr. Jenkins: I take note of what my hon. Friend said. I believe that these proposals go much further along the lines of the representations which were made, among others, by women's organisations when the rather pale proposals of the previous Government were published.
Regarding regional offices, I ask my hon. Friend to wait for the White Paper and perhaps the Bill. I have not reached a decision on that matter yet. However, I should stress, to avoid any misunderstanding on the point, that it will not be necessary for a woman, or for that matter a man who thinks that he may have been discriminated against on sex grounds, to go to the Equal Opportunities Commission to secure redress. There will be a right of individual access to the tribunals and to the courts, though the Commission may, if it thinks it right, take up and support individual cases. My desire is that its main rôle should be strategic rather than dealing with a large mass of individual cases.
On the last point, damages will be possible. The amount will not be for me to assess, but damages certainly will be possible. In some ways I think that

redress is even more important than damages.

Mrs. Winifred Ewing: May I add my voice to those who have welcomed the statement and the Bill, particularly the fact that it involves housing? Will the Home Secretary consider including in his legislation a provision requiring local authorities to transfer the tenancy of a local authority house to whichever spouse is awarded custody in cases of either separation or divorce?

Mr. Jenkins: I will certainly consider that suggestion.

Miss Fookes: Does the Home Secretary intend to include within the scope of the Bill the question of women's ordination within certain denominations of the Church and their selection, or rather non-selection, by parliamentary parties?

Mr. Jenkins: I think that I have already dealt with the second point in reply to the hon. Member for Hazel Grove (Dr. Winstanley).
On the first point, I think that the intention will be to exclude the clergy, but I suggest that the hon. Lady should await the White Paper and then put forward any representations on this or any other point which she feels appropriate.

Mrs. Renée Short: I thank my right hon. Friend for the statement that he has made today. All those women's organisations, including the Labour women's organisations, which have done so much work on this matter will be gratified that this statement has been made.
Is my right hon. Friend aware that the discrimination and prejudice are so deep-seated that they are passed on from one generation to another? If he is to eliminate discrimination in education and training he must tackle the discrimination in publishing, because it is there that it begins at a very early age. I mean discrimination against girls, of course. Will he also confirm that the legislation will deal with the problem of discrimination in universities, particularly in university medical schools, against women students?

Mr. Jenkins: Yes. All educational institutions will be, or are intended to be, included within the provisions of the Bill. The distinction between the maintained and the non-maintained sectors—the universities are in the non-maintained sector


for this purpose—will be that in the maintained sector complaints will first fall to be dealt with by education ministers whereas in the non-maintained sector complaints will fall to be dealt with under the general provisions of the Bill. In other words, they can be taken by the Equal Opportunities Commission or individual actions can lie before a county court.

Sir John Hall: Is the right hon. Gentleman aware that there will be considerable disappointment that he has decided to exclude pensions and social service benefits, especially by those men who had hoped to retire at 60 in common with women? In actuarial terms, as women live much longer than men, is this not a considerable discrimination against the male sex?

Mr. Jenkins: It is a matter to be taken into account. I am sure that it is sensible to exclude matters specifically dealt with by separate legislation. Pensions are not unique in this respect. Taxation and matters relating to nationality and immigration laws are exempt. This is sensible where there is specific legislation on the statute book and when the House is habitually considering possible amendments to such legislation. I do not think it reasonable for the hon. Gentleman to complain about exclusions from the Bill. I assure him that they are immensely fewer than the vast army of exclusions in the previous Government's proposals.

Mr. Michael Stewart: Will provision be made to secure that hereditary titles and offices should in future descend to the eldest child irrespective of sex?

Mr. Jenkins: Great though the attention has been that I have given to the details of this important measure over the last few months, I must tell my right hon. Friend that I have not so far considered methods of recruitment to the other place. Indeed, I think that possibly the composition of the other place may fall within the sphere of separate legislation.

Mr. Dudley Smith: Is the right hon. Gentleman aware that his decision to retain the Factories Act legislation is a retrograde step? If there are to be full employment opportunities between men

and women he must think again on this issue. Secondly, will he confirm that he sees the Equal Opportunities Commission as an initiating body regarding equal employment rights for women?

Mr. Jenkins: I agree with the hon. Gentleman, at least to the extent that it is a matter for debate and consideration whether the protective legislation—the Factories Act 1961—should be retained. I think that on balance it is right to do this, for the time being at any rate, though, as I indicated, it will be kept under review. I think that we should keep it under close and fairly urgent review as what I hope will be the success of the legislation unfolds itself. I agree with the hon. Gentleman on his second point.

Mrs. Wise: Is my right hon. Friend aware that his decision to retain the protective legislation in the Factories Act will be widely welcomed by women trade unionists and that it will prevent unscrupulous employers continuing to take their customary advantage of women workers? Is he further aware that women will support any endeavours made by men to improve the provisions in the Factories Act relating to male workers? Will he take careful note of the reference by the right hon. Member for Leeds, North-East (Sir K. Joseph) to the danger of applying pressure to business and industry and take that as a clear indication that the Opposition think that pressure on business and industry is necessary if we are to get equal opportunities for and no discrimination against women? Why would he bother to raise that point otherwise?

Mr. Jenkins: I think that my hon. Friend has clearly put the other side of the argument for the retention of protective legislation. While so many women are employed in underpaid, low-grade work with inadequate facilities for promotion and training, there is a reasonable argument for balancing that with protective legislation. If the Bill enabled us to move fairly quickly into a position where that was no longer the situation, accompanied by the Equal Pay Act, a new position would arise and the ideal would be to have no differential in this respect. But, for the time being, without question the protective legislation will be retained.

Mrs. Kellett-Bowman: Will the right hon. Gentleman accept that I welcome many aspects of his statement, which are similar to the proposals which we ourselves put forward and would have acted on? But would he also accept that what most women, young or old, want is an independent income and fairness in the tax system? Most right hon. and hon. Members will know that those are the points on which they are approached by most of their women constituents. Will he also accept that by excluding social security, pensions and alterations in the tax system, he is cutting the ground from under a great deal of his Bill? Will he accept, further, that the tax credit system which we intended to introduce would have meant a larger step forward for widows, married women and mothers in the scope of an independent income than any of his proposals? Would he therefore use his considerable influence to see that a tax credit system is brought in, to the great benefit of the women of this country?

Mr. Jenkins: No, I do not accept all the hon. Lady's propositions. Indeed, it would be difficult to do so, because two of them were self-contradictory. She was kind enough to say that she welcomed many of my proposals, but went on to say that in her view they were virtually the same as the previous proposals. If she thinks that, she does not understand these proposals and her welcome may become modified as time goes on. I assure her that these proposals are

very different and go a great deal further. While I accept that tax measures are important to women, I do not accept that the whole question of equal opportunity in industry, the professions and a wide range of other occupations is not also of the greatest possible importance to women.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's Sitting, Proceedings on the British Railways Bill, set down for consideration at Seven o'clock by direction of the Chairman of Ways and Means, shall, instead of being considered at that hour, be considered at Ten o'clock, and may be proceeded with, though opposed, until any hour.—[Mr. Mellish.]

STATUTORY INSTRUMENTS

Mr. Speaker: If the House is agreeable, I will put the Question on the two statutory instruments together.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Statutory Instruments),
That the draft Caribbean Development Bank (Additional Contributions) Order 1974 be referred to a Standing Committee on Statutory Instruments.
The the draft Redundancy Payments (Calculation of Payments) Order 1974 be referred to a Standing Committee on Statutory Instruments.—[Mr. Mellish.]

Question agreed to.

ESTATE AGENTS REGULATION BILL

4.3 p.m.

Mr. Norman Fowler: I beg to move,
That leave be given to bring in a Bill to regulate certain practices of estate agents and agents for business transfers.
In view of the next business, I will try to make a short speech but I emphasise that this is an important area. The aim of the Bill is to give the public added protection when selling or buying houses or other property. It recognises that a house is the chief investment of most members of the public. My case is that added protection is needed if the public are to receive the full benefit of that investment.
The Bill is in no way an attack on the many reputable estate agents who practise in this country. Many are members of professional societies and have their own professional codes of conduct. There are others who, although unqualified, provide a good and honest service. But the Bill recognises that there is a small minority who abuse their position and bring the whole profession into disrepute. The aim of the Bill is to prevent the public from suffering at the hands of this minority.
My attention has been drawn to this area by a number of cases concerning my constituents and cases reported in the Birmingham Evening Mail. They are local cases, but together they make out a case for reform in this area. This debate may lead to further cases coming forward, and if so I will certainly do my best to see that they are investigated.
The first case concerns a constituent, Mr. Frank Podmore, who wanted to sell his semi-detached house. He consulted his employer and the latter answered an advertisement by an estate agent, Eric Timms, of Corporation Street, Birmingham, who said that he urgently required older property. Mr. Timms visited the property in Sutton Coldfield and a discussion later took place in the office of Mr. Podmore's employer. The employer had to leave the office for five minutes, and when he returned he found that Mr. Podmore had agreed to sell the property and had signed a scrap of paper which was an agreement to sell the house to Mr. Timm's son for £500.
This was considerably below the market price, but as Mr. Podmore explained:
When I was alone in the office, Mr. Timms and his colleagues said that I had a bad house and it would cost a lot of money for demolishing and rebuilding in place. They talked about how much my parents paid for it, about £400. They said they could not offer more than £500 and I foolishly signed the paper. I was fed up with the worry of it.
I am glad to say that this case has now been settled, but only after a series of articles in the Birmingham Evening Mail and legal action. As a result, Mr. Podmore has now sold his house for £4,500, or nine times what he was originally offered.
The second case was reported in the Birmingham Evening Mail on 19th July. A Birmingham insurance inspector placed an advertisement to sell his maisonette on a Friday evening. He was visited the same evening' by a representative of Newent Properties who asked whether it could sell, his house. The inspector thought he might eventually need the services of an estate agent, so he signed. But the next day he sold his house to a member of the public answering the advertisement.
On the Monday he rang Newent Properties, and said that he no longer needed its services, but the firm told him that he owed it £150 commission. He had unhappily signed a sole selling rights agreement which entitled the firm to a commission irrespective of who sold the property. But there was one thing—he had at least completed a sale.
In the third case, a member of the public came to my advice surgery. He had wanted to sell his business, a small general store, and entered into an exclusive three months' contract with the firm of F. E. Royle of Princes Chambers, 6, Corporation Street, Birmingham. A would-be purchaser came along who paid a deposit to Mr. Royle. However, the would-be purchaser withdrew and the property remains unsold, through absolutely no fault of my constituent, who still wants to sell this business.
Unhappily for him, however, he had signed not only a sole selling rights agreement but an agreement which bound him to pay the full commission once a deposit had been paid. Thus, Mr. Royle is now claiming a commission of £167, in spite of the fact that the business remains


unsold, on the ground that a deposit was paid.
The House will doubtless note that there is a certain similarity between the second and third cases. It will not come as a surprise, therefore, to learn that F. E. Royle is the sole agent for Newent Properties. The standard contract of F. E. Royle, which has been given to me, gives that firm, first, sole selling rights for three months and, second, a right to a commission whenever a contract to purchase has been signed or a deposit paid. The contract warns that anyone imitating its form will be prosecuted. If nothing else, I am sure that the public are very grateful for that assurance.
These are three cases in just one city. I cannot imagine that Birmingham is alone in this. One of the major reasons why these cases have become public is the efforts of the Birmingham Evening Mail. I pay tribute to its reporting, which has been in the best traditions of British journalism.
My Bill will seek to ban the kind of practices that I have described. It is already the case that a member of the Royal Institution of Chartered Surveyors, for example, would be subject to disciplinary proceedings in any of the three examples that I have given. In the first case, a member of the RICS dealing on his own account would be required to warn the would-be seller to take legal advice before agreeing to the sale. In the second case, a member of the RICS is prohibited from doorstep touting; and the institution also strongly deprecates sole sale rights agreements. In the third case, a member of the RICS would not claim commission when a deposit had been paid but only if a sale had actually been completed. My belief is that conditions of this kind should be made general to all estate agents.
The Bill seeks to encourage professional estate agents and estate agents with high standards, but to drive out the rogue estate agent who tries to exploit the public. I am conscious of the many attempts that have been made in the past to secure registration of estate agents but without success. I am also conscious of the fact that this Bill, coming so late in the Session, will not reach the statute book. But my aim is to point out that the arguments that have led to attempts

being made in the past, including the attempt by one of my hon. Friends, to whom I pay tribute, still apply and there is a case for action and urgent action.

Question put and agreed to.

Bill ordered to be brought in by Mr. Norman Fowler, Mr. Reginald Eyre, Mrs. Jill Knight and Mr. Harold Gurden.

ESTATE AGENTS REGULATION

Bill to regulate certain practices of estate agents and agents for business transfers presented accordingly and read the First time; to be read a Second time upon Friday 26th July and to be printed. [Bill 100.]

ECONOMIC SITUATION

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Coleman.]

4.12 p.m.

The Chancellor of the Exchequer (Mr. Denis Healey): As opinion outside the House has recognised, the measures I announced yesterday do not amount to a major correction in the course I set for the economy in my Budget last March. Such a correction, if it is needed, must wait for the Budget which I have promised in the autumn. For many reasons, which I shall explain, it would be a mistake, to make any major increase in the level of domestic demand at this time. Nevertheless, there have been some changes in the very uncertain picture of our economy that I painted on 26th March and I hope the House will find it convenient if I take this opportunity to describe them.
When I introduced my Budget at the end of March we had already brought the three-day working week to an end but it was too close for us to make any accurate estimate of its effects, as I made very clear at the time. Our best estimate then, which appeared optimistic compared with some of the estimates then being made by industrialists, was that the gross domestic product might have fallen by perhaps 10 per cent. in the first quarter and that the fall in the first half-year as a whole might be close to 5 per cent.
It is now quite clear that industry coped with the problem set by the then Government's decision to impose the three-day working week far better than it


thought it was doing at the time. The latest estimate, which may still not be a final judgment, is that the fall in the gross domestic product in the first quarter was around 3½ per cent., and as there seems to have been some recovery in the second quarter, the fall in the first half-year looks like being quite modest.
The most encouraging aspect of our economy during the early months of this year was a surprisingly strong improvement both in trade and investment. On latest estimates, manufacturing investment actually rose by over 7½ per cent. in the first quarter compared with the second half of 1973, against all the predictions being made at the time. The volume of our export of goods and services rose by 4½ per cent., whilst the volume of imports actually fell. Consumers' expenditure, the largest component of domestic demand, fell only marginally.
Most significant—and, I confess, most surprising of all—was the comparatively low rundown of stocks. These fell £218 million, much less than was forecast at the time. The House will recall that in the Financial Statement in March we forecast that the gross domestic product would return in the second half of this year to a level of some 2½ per cent. up on the second half of 1973. This still looks about right but the pattern of demand is a bit different.
We cannot now expect restocking on the same scale as was forecast in March. Consumers' demand has shown some recent signs of weakness, although in the first half-year it was almost exactly as forecast. As I reminded the House yesterday, the new pensions increases are now adding to purchasing power. I expect the recovery in retail sales apparent in June to continue. Export demand remains strong and the momentum of manufacturing investment may exceed the 5 per cent. growth this year predicted by the latest Official Survey of Intentions. The prospect is still for further recovery during the rest of the year, but, without changes in Government policy, growth could still be a bit below our earlier expectations; and looking through next winter into next year the prospects seemed less encouraging unless policies were changed.
Domestic demand would continue some way below the growth of our productive

potential. But against the prospect for domestic demand next year, a prospect more or less confirmed by recent studies carried out international organisations like OECD and the European Community, our prospects for visible trade are steadily improving. We now have the figures for the balance of visible trade in the first six months of this year and, as expected, they show a continuing heavy deficit on our trade in oil. The oil trade deficit in the second quarter averages £312 million a month, compared with less than £80 million a month in the third quarter of 1973, before the current round of oil price increases began.
This represents an annual deficit resulting from the increase in oil prices alone of nearly £2,800 million, two-thirds of the rate at which our overall current account deficit has been running this year. But we have made very satisfactory progress towards eliminating the non-oil deficit which was still rising steadily at the end of last year. In the second quarter of this year the non-oil deficit was 25 per cent. less than that recorded in the first quarter, and despite the difficulties of short-time working that was already 20 per cent. down on the deficit in the last quarter of 1973. Meanwhile, there has been an adequate flow of borrowed funds to finance the overall deficit and I expect no difficulty in financing it in the months ahead.
I told the House yesterday that I have not yet had to draw one penny of the $2½ billion loan negotiated at the time of the Budget and we have concluded an agreement with Iran for a further line of credit of $1,200 million to be drawn by public sector bodies. Meanwhile, the pound has remained stable, fluctuating over the last four months around a level only 17 per cent. below that fixed in the Smithsonian negotiations in 1971, and stronger than the average level in the eight months preceding the General Election. This gratifying strength of sterling reflects the continued inflow of funds from investors abroad who have confidence in our economy.
Our central problem is a rate of inflation which some say could have been 20 per cent. by the end of this year if I had not taken the action I took yesterday. This rate of inflation would have been due in part to the threshold agreements which


the last Government made a central feature of phase 3 in their statutory wage controls. I doubt whether any right hon. Gentleman on the Front Bench opposite would deny that when the previous Government gave this central rôle to threshold agreements last October they expected commodity prices to level out. Instead, we have had a continuing rise in commodity prices and a fourfold increase in the price of oil. These increases in world prices will continue to feed through into our domestic prices at least until the end of this year, triggerinig off one threshold agreement after another as they flow out of the pipeline into the shopping basket.
When the present Government took power five months ago the rate of inflation was already over 13 per cent, It is now 16½ per cent. This is not due to excessive wages. The increase in earnings after tax has not run ahead of the rate of price increases. But six threshold payments have now been triggered off by these price increases. The total annual cost of these payments to employers—in the local authorities, the nationalised industries and private business—must have risen to some £1,200 million in a full year, with another £200 million to follow with each succeeding trigger of the threshold—and more if, as is likely, the number of workers covered by such thresholds rises above the 10 million who are probably already covered by now.
Apart from the impact of these agreements on the employer, the consequent increase in our industrial costs must reduce the competitivity of our exports and lead to further price increases in six months or so. It is for this reason that I felt it essential, without waiting for the autumn Budget, to take immediate action on the cost of living now. That is the central and sufficient purpose of the measures I described to the House yesterday. But before I describe them in more detail, I must comment on the secondary impact of the measures on demand in our economy.
All observers, both at home and abroad, agree that overall demand may fall substantially below capacity in the next financial year unless I take appropriate action in the interim. I hope that the House will forgive me if I lead it for a moment into the murky under-

world inhabited by the theoretical economists who have recently been moving in increasing numbers out of their natural academic habitat into the public print. I fear that when they enter the arena of real life they tend to concentrate on those elements in an infinitely complicated human situation which can be most easily identified, and described with numbers, and to base their generalisations on far too narrow a view of the total picture.
I agree with a great deal that the hon. Member for Worthing (Mr. Higgins) said in a recent article in The Times. I would not deny that many of their insights are of immense and sometimes startling value to those, like me, who have to wrestle with the real world. But they provide no escape from the need to make judgments which can never be more than precarious as they concern a worldwide situation which even in its narrow economic aspects is constantly changing and can never be fully known at any time, still less fully understood.
At the present time most of the advice which floods in on me from these sources falls into one or the other of two broad streams of thought. There is one set of views strongly represented on the Opposition benches and in the Conservative Press, and well typified in one of its variants by the group of economists led by Professor Harry Johnson, who, having failed to make any impact on the previous Prime Minister, recently addressed a letter to my right hon. Friend They urged us at all costs to avoid the calamitous mistakes made by the previous Government and to concentrate our efforts on reducing the increase in public expenditure, on cutting the public sector deficit and on controlling the money supply.
I have some sympathy with their views, As the House will know, the money supply is now under the strictest control it has known for many years. In the current year, so far M3 has risen only 2.3 per cent. and M1 0·8 per cent. M1 actually fell last month. But members of this school usually go much further and ask me to cut overall demand far below capacity, far below what is needed to make room for the maximum increase in our exports and investments which can be practically conceived. They ask me blithely to plan on unemployment rising to 2 million or above, sometimes allying this with a recommendation that Britain


should return to the gold standard—a quaint conceit fully worthy of its progenitor.
To take such advice, however, would be totally unacceptable to any democratic Government in Britain. Indeed, even the previous Conservative Government, in the most inhuman rigours of its Selsdon phase, took fright at the obvious consequences when unemployment rose to 1 million. I say again, as I said at Budget time, that the first principle which will guide the management of the economy as long as I am Chancellor of the Exchequer is that we must make the fullest possible use of the manpower and resources available to us.
The other main stream of current economic advice takes almost the opposite view. It is rightly concerned that one effect of the rise in oil prices is to deflate demand both in Britain and in the world economy. There is no chance for several years that the oil-exporting countries will be able to use the vast new sums of money they are receiving to purchase goods. This year the monetary surpluses of the oil-producing countries with the rest of the world will be between $60 and $80 billion and it is likely to be about that level next year as well.
Since this money is paid by the consumers but not spent by the producers, it represents a net reduction in world demand. Unless means can be found of recycling these surpluses so that the oil-consuming countries can spend them, we could be in for a world slump of 1931 proportions, and the risk would be compounded if the consumer countries adopted beggar-my-neighbour policies aimed at eliminating their oil deficits before the producers were able to absorb the goods needed for that purpose.
So far the international private banking system, working largely through the Euro-markets, has managed the problem of recycling with far less strain than might have been expected. But there may be a limit to the will and the ability of private banks to accept that deficit and then to lend this stupendous and continuing flow of short-term money. So discussions are already taking place, in the IMF, the OECD, the European Community and the Bank of International Settlements, with a view to establishing

other means of handling these surpluses in the future so that the whole weight does not fall on the Euro-market. I believe that the new Iranian loan which I announced yesterday may provide one useful pattern for the future. I doubt whether, on reflection, the right hon. Member for Carshalton (Mr. Carr) will feel that the comments that he made yesterday afternoon—I agree that they were made at very short notice—were wise. They certainly would not serve the interests of any Government of which he was a member. In any case, it ill becomes a member of the previous Government to make them, because in the months up to the last General Election the previous Government encouraged the public authorities to borrow $2,600 million on the Euro-markets not to finance an oil deficit but to finance a deficit which rose overwhelmingly from trade in goods other than oil. That, it seems to me, is much less easy to justify than is borrowing to finance the purchase of oil, for which at present the producing countries are unable to accept goods in return.
I return, however, to the second main stream of economic advice that I have been receiving. Many of its supporters fiercely attacked my last Budget for failing to increase domestic demand sufficiently to offset the deflationary effect of the rise in oil prices. To some extent I accept that criticism. I made it clear at the time that if I were concerned with managing only the domestic aspects of our economy I should have preferred to risk having a bit too much demand rather than too little.
But to suggest, as some representatives of this school have done, that I should feed £2,000 million of extra demand into the domestic economy immediately, at a time when both inflation and the balance of payments deficit were running at record levels, would be no less a recipe for catastrophe than to follow the deflationist school. No one who knows the current state of thinking of those abroad on whose confidence our economy so largely depends could doubt that reflation on this scale at this time would mean a sudden increase in our trade deficit, the collapse of sterling and a domestic inflation of South American proportions. I preferred, therefore, in March, to err on the side of caution. The effect of my Budget judgment was in fact to


reduce demand in the economy by about £200 million.
In the light of events since then, I believe that I was too cautious. The effect of the measures I announced yesterday will be to put back the £200 million of demand into our economy this year which I took out in March. I believe, however, that for the Chancellor of a country in Britain's position at this time it is always right to err on the side of caution. It is much easier, and more pleasurable—and, perhaps, more profitable—to correct that sort of error than to be forced into the sort of step which my predecessor had to take last December after nearly two years of profligate irresponsibility.
I must frankly tell the House that in my judgment if I made a mistake yesterday it was once again on the side of caution. But there will be an opportunity of correcting that error too, if error it proves to be, in three or four months' time when I expect to be introducing my autumn Budget. I believe that by that time the risks of a world recession will be far more visible to some of those outside Britain who at present prefer to ignore the warning signs. If so it may then be right for me to take more significant measures to ensure that our economy is not working too far below capacity next year.
Meanwhile, although there is at present need and scope for a modest in. crease in demand—a contingency of which I forewarned the House in March—the question which faced me was what means were likely to have the most beneficial effects on other aspects of our economy. Here the conclusion was irresistible. The current rate of inflation in Britain, though no longer by any means unique in the Western world, as it was last year, is now fuelled by the mechanism of threshold agreements. Threshold agreements may well play a useful rôle in guaranteeing the maintenance of living standards and reducing the fear of inflation at a time when world prices are stable. But I doubt whether anyone could deny—I shall be interested to see what the Leader of the Opposition has to say when he speaks tomorrow—that at a time when world prices are still rising rapidly they simply accelerate inflationary tendencies since every threshold payment will be reflected

in price increases within six months or so. So anything I can do now to cut the rise in the cost of living by reducing the number of threshold payments will not only reduce the rate of inflation this year but produce a further reduction next year too.

Mr. Nigel Lawson: I am most grateful to the right hon. Gentleman for giving way. He goes on about the terrible effects of pay increases through threshold agreements, but these are precisely the same as the effects of increases in pay negotiated in other ways. Would he not do better to talk about the effects of increases in pay in general?

Mr. Healey: No. There is a very big difference between monthly automatic pay increases and wage settlements made once every 12 months, taking account of increases over a long period, which is the intention of the advice given by the TUC to its members.

Mr. Edward Heath: Will the right hon. Gentleman make it quite plain: is he in favour of threshold agreements or is he not? The Prime Minister strongly pressed me when I was Prime Minister to introduce threshold agreements, which we did in phase 3, and they were negotiated over a wide range of unions. The Chancellor has also said that the TUC has advised that pay increases should only keep pace with the cost of living, and first stage threshold agreements do precisely this. Will he say clearly: does he favour threshold agreements or is he opposed to them?

Mr. Healey: First of all, the essence of our policy on free negotiation and collective bargaining is that unions and employers should be able to decide through the normal process of negotiation whether they should use threshold agreements or not. But, in answer to the Leader of the Opposition's question, I indicated my view a moment ago. I think that once existing world price increases are fed through the economy there is a strong case for threshold agreements, but I do not think the Leader of the Opposition or anybody in the House can possibly argue that the introduction of threshold agreements on the eve of the biggest explosion of world prices in our history has operated, and could not otherwise operate, virtually to increase the


rate of inflation imposed not by internal but by external factors.
The Leader of the Opposition knows as well as I do that if he had guessed last October that there was an explosion in world prices immediately to follow he would never have made these agreements a central feature of his compulsory wage control.

Mr. Maurice Macmillan: rose—

Mr. Healey: I really must get on. I have answered, very straightforwardly, I think, two questions which have been put to me and if any other right hon. or hon. Gentleman has different views no doubt, with your permission, Mr. Deputy Speaker, or that of Mr. Speaker, he will have an opportunity of defending his folly in the debate over the next two days.
That is why the main thrust of my measures yesterday was directed towards reducing the cost of living in the next three months up to the end of October—the period in which the last Government's threshold arrangements apply. I must confess that I had a slight feeling yesterday that some hon. Gentlemen felt there might be some other significance in my determination to concentrate reductions in the cost of living into the next three months. I can assure them that the time factor was inevitably determined by the nature of the legislation which hon. Members opposite forced through the House against our opposition last autumn.
I must confess I have been most surprised and disappointed, even to some extent shocked, by—what shall I call it?—the grudging welcome my measures received yesterday from the benches opposite. As for the amendment they put down, which we are to debate tomorrow, what a generation of vipers they are, Mr. Deputy Speaker! I would have expected at least a formal welcome for the relaxation of dividend control which they pressed on me so often, but perhaps they wanted it still pegged at 5 per cent. where they fixed it 18 months ago. It may well be that in current circumstances many companies might not choose to take ad- vantage of this relaxation to increase their distributions, but I believe that the prospect of a revived capital market will at the very least make some companies

more ready than they are today to borrow money from the banks in order to increase their investment. I know that some hon. Members would have liked me to announce a modification of the Price Code now bearing particularly heavily. But, as the House knows, my right hon. Friend the Secretary of State for Prices and Consumer Affairs is now engaged on a major review of the Price Code and I think it would be a great mistake to preempt that comprehensive review by taking a major decision in this field at this time before all the consequences could be fully studied.
So far as I could follow the right hon. Member for Carshalton's rather incoherent criticism of my measures yesterday, it must rest either on the volume of public expenditure involved or on its composition. So far as the volume is concerned, the measures I announced yesterday will cost the Revenue £353 million in the current financial year and increase the public sector borrowing requirement by about £340 million. In both cases this does not include the cost of the increased food subsidies, which I announced yesterday, since this was already provided for in the March Budget. A small increase in the public sector borrowing requirements this year is not likely to have an unacceptable effect on inflation, the balance of payments or money supply.
The demand effect of the measures will be under £200 million at an annual rate by the end of the current year. This will fall short of much that the advice I have recently received was prepared to envisage. I accept that it is the Liberal Party's view that I should have gone much further but, for the reasons I have already given, I believe this is about right. In any case, I cannot accept criticism from the Conservative benches opposite that I have done too much, because during our discussions on the Report stage of the Finance Bill only last week they moved, voted for and in some cases carried amendments whose aggregate cost in revenue would have been some £500 million, all but £40 million falling in the current financial year.

Mr. Robert Carr: Will the right hon. Gentleman quantify and list the amendments which we moved and voted


for which would amount to anything like that sum?

Mr. Healey: The only amendment to which I referred for which the right hon. Gentleman did not actually vote last week was one involving a reduction of £300 million in the taxation of companies in the current financial year, and the right hon. Gentleman indicated his willingness to vote on that amendment, too, unless I succeeded in persuading him not to do so. I dare say that he is very glad now that I did so succeed.

Mr. Carr: Is not that what Oppositions always do when they move amendments? Is not that what the right hon. Gentleman used to do and what every right hon. Gentleman has done in moving amendments to Finance Bills? Of course it is. When we put down amendments in Finance Bills we do not know what the Government's reaction to them will be until they reply to the debate. That is perfectly normal. The Chancellor is not saying that our amendments involved £500 million. He has reduced his figure to £200 million, but he knows that it is much less than that because, on the Financial Secretary's own evidence, it was impossible to put into the economy in the current year £140 million of his figure of £200 million.

Mr. Healey: The right hon. Gentleman has a guilty conscience on this matter. He now regrets the frivolity and irresponsibility of the amendments he was pushed by his back benchers into moving on Report. I shall be delighted to return to this subject as often as the right hon. Gentleman wishes.
It is true that the distribution of this money would have been very different from that I chose yesterday. It would have gone exclusively to the company sector, to those living on unearned incomes, to landowners, land speculators and pools promoters.

Mr. Carr: Will the right hon. Gentleman stop using this word "speculators"? Is he not aware that before pressing that amendment we had a specific assurance from the Chief Secretary that the amendment we proposed did not in any way reduce, even by one penny, the tax on land speculation? Will he not talk about our moving an amendment in favour of land speculators?

Mr. Healey: I was using the phrase used by my precedessor, the right hon. Member for Altrincham and Sale (Mr. Barber), when he proposed the tax and undertook to introduce it at the highest rate of income tax when he made his statement to Parliament last December. The interesting point is that as far as I can discover the money which the Opposition's Report stage amendments would have involved would have been additional to and not alternative to the money which I am spending. Throughout the debates on my March Budget and ever since, spokesmen of the Conservative Party in the House and outside have attacked me because the total effect of the measures I took in. March was to increase the cost of living—and that was, indeed, the case.
Perhaps I may remind the House of the figures. The subsidies on food and rents meant a reduction in the cost of living of 2·2 per cent. This was offset by increases in indirect taxation, mainly in the excise duties, of 1·75 per cent., leaving a net reduction in the cost of living of only 0·45 per cent. This, however, was wiped out by the increase in the nationalised industry prices which added a full 2 per cent. to the cost of living leaving a net increase in the cost of living of about 1½ per cent.

Mr. Heath: Do these figures mean a reduction in the actual cost of living at that time or a reduction in what it would otherwise have been? There is a distinct difference there. The Chancellor has always misled the House and the country as to how much was the reduction in the actual cost of living.

Mr. Healey: It is a reduction in the cost of living in exactly the same sense as the £340 million yesterday is an increase in the public sector borrowing requirement. Of course, it is not an absolute reduction in the cost of living. I have made that clear repeatedly and I have never attempted to disguise it. I have pointed out that the cost of living has already gone up nearly four points since the General Election. The increases in the prices of the nationalised industries, which were long overdue and which the previous Chancellor had undertaken to make as far back as last December, meant a net increase in the cost of living of about 1½ per cent. These increases in prices


arose because the previous Government allowed the emerging deficits of the nationalised industries to rise to £1,400 million by March. The increases in those prices that I announced reduced this deficit to £500 million.
Opposition spokesmen have been loud in their condemnation of these increases outside this House, but they have never dared to attack them in the House. They have taken refuge in the lame excuse that while they would certainly have increased nationalised industries prices, they were unable to say whether they would have increased them to the extent that I did. I therefore ask them once again—and there will be many opportunities for them to reply in the next two days—whether they believe that the £500 million subsidy is too little. If so, how much bigger do they think it should be? Or do they think that the figure is too much, in which case what further increases in nationalised industry prices do they recommend? Until and unless they answer these questions everything they have said on this issue is self-conscious humbug.
I doubt whether I shall ever get an answer to those questions, but one thing is for sure: the measures which I took yesterday wipe out practically the whole of the increase in the cost of living which resulted from the essential and overdue increases in March in the prices of the nationalised industries. The reduction in VAT and the help to the rates alone will produce a reduction of nearly 1½ per cent. in the retail price index as against just over 1½ per cent. increase resulting from the March measures. I had hoped that the Opposition, who have attacked me so often for the effect of the March measures on the cost of living, would unite in welcoming the fact that I have now cancelled that effect. Perhaps they would have sought to achieve the same effect by some other means, but if so, I hope they will say what these other means would have been. My impression is that they would not wish to quarrel with the reduction in value added tax. It was they who gave Chancellors the power to reduce tax in that way by means of the regulator.

Mr. William Baxter: Before my right hon. Friend leaves the question of the rates—

Mr. Healey: I have not got on to it yet.

Mr. Baxter: My right hon. Friend mentioned it just now in describing the effect his action would have on the cost of living. Will he explain, on the basis of what he just said about the effect of reducing the cost of living in certain areas, how much his proposals will affect the cost of living in Scotland?

Mr. Healey: If my hon. Friend the Member for West Stirlingshire (Mr. Baxter) will put that question down I will seek to answer it. However, the reduction in the cost of living over Britain generally is likely to be just under ½ per cent., which is the figure I gave the House yesterday.
I was about to come to the point about rate relief. If the Opposition are not satisfied with the position on value added tax, no doubt they will tell us, but are they arguing against the relief I have given to the domestic ratepayer? Only a few weeks ago they joined a united House in voting through a motion to give precisely this relief. I understand from the newspapers that they were in the last stage of including it as part of the election manifesto. Leaders of both parties on the Opposition benches have many times in recent weeks expressed their desire for some sort of Government of national unity. Let them unite with us tomorrow in welcoming the help we are now offering to the hard-pressed domestic ratepayer.
What is left? There is a doubling of the rate of regional employment premium so as to restore its real value to what it was in 1967. The House will know that the regional employment premium is regarded by both sides of industry as an essential instrument for creating greater employment in the regions that suffer from higher unemployment than the average. There may be disagreement about the precise amounts of employment created by REP. The range accepted by those who have studied these matters varies between 20,000 and 50,000 at the 1967 rate.
Incidentally, I should make an apology to the House, and particularly to the hon. Member for Cornwall, North (Mr. Pardoe), because I unwittingly misled the House on the employment effect of the


total package of measures I announced yesterday. The figure of 20,000 reduction in unemployment by the end of next year which I quoted is a bare minimum for the direct effects. The total effect is likely to be more than twice that, although I agree with the hon. Member for City of London and Westminster, South (Mr. Tugendhat) that such estimates must be open to great uncertainty.
My main point is that these are figures of the reduction of unemployment. The increase in employment may be three time as high, because experience shows that for every person taken off the register two others not on the register—often part-time married women—come into employment. Thus, the total effect on employment of all the measures I announced yesterday could be to increase employment by the end of next year by between 100,000 and 150,000. I apologise to the House for having given a figure so much lower than the true figure yesterday. [Interruption.] The Leader of the Opposition was once Minister of Labour, as that office used to be called. The effects to which I have referred were analysed and researched when he held that office. His right hon. Friend the Member for Carshalton will also know that they are true because he at one time—although one would not think it—held the same responsibilities.
The effect of the regional employment premium is not only to increase employment in the regions. It will improve both the cash flow and the profitability of companies in the regions. I understand that the Price Commission treats the regional employment premium as reducing unit labour costs for the purpose of calculating permitted price increases. On the other hand, the REP increase of £1·50 will enable a firm to avoid the equivalent of 75p of productivity reductions. In other words, the REP operates as a selective way of removing the productivity reduction from threshold payments in a way that reduces prices instead of increasing them. Therefore, it will give substantial help to company cash flows. But equally important is the fact that REP will operate so as to increase the competitiveness of our exports from the regions and will therefore serve to improve our balance of payments.
I hope that the Conservative Opposition in their new mood of national

unity, in which they are casting so many of their other theological dogmas to the wolves, will now sacrifice their insensate opposition to the regional employment premium and join the CBI and TUC in welcoming the step I announced yesterday.
I do not claim that the measures I announced yesterday will have a major impact on the economy, but the modest improvements they will bring in demand, together with the impact of the doubling of the regional employment premium, will serve to assist us in dealing with some of the threats to employment in the shorter term.
I shall consider in the autumn, as I have explained, whether action on a larger scale is justified and possible in this field. But I believe that the impact of my measures on the rate of price increases will play an important rôle in launching the new system of freedom in collective bargaining and in ensuring that we can achieve a steady and significant reduction in inflation in the months ahead. For both these reasons, I commend them to the House

4.55 p.m.

Mr. Robert Carr: In discussing our economic situation, we must first be clear about our basic objective. I have no doubt—it must be a widely shared belief—that the most urgent and important need of the country is to get inflation under control.
Over the past four months prices have been rising at an annual rate of more than 20p in the pound. The Chancellor of the Exchequer said that he had been warned that if he did nothing that would be the rate reached by the end of the year. But it is already the rate. I repeat that over the past four months prices have been rising at an annual rate of more than 20p in the pound, and that is terrible. If it went on, prices would double about every four years. But, of course, if it went on it would almost certainly accelerate.
Reducing this rate of inflation is the clear top priority, because if we fail to control inflation we shall fail in all our other objectives—our objective of full employment and our objectives for the social services, for improving our environment and for our personal standards of living.
Of course the Chancellor declares that he shares this aim. He said yesterday in the early part of his statement that the first and main objective of his proposals was to attack inflation at source. In our view, his measures wholly fail to meet that objective. It seems to us that he is like a doctor trying to cure a wasting disease such as tuberculosis with a bottle of tonic. That is our basic, damning criticism, not only of the Chancellor's mini-Budget proposals yesterday but of the total effect of his and his colleagues' plans since they came to power in March. Domestically-produced inflation has accelerated and will continue to accelerate as a direct result of the Government's actions and plans unless they are changed.
Before developing criticisms of the Chancellor's measures in detail, I should like to put on record that there are two proposals of which I wholeheartedly approve. The first is the relief he is proposing on the burden of rates. The right hon. Gentleman might have been a little more honest if he had adimitted to the House that that is the direct result of the strong pressure of the Opposition in Parliament transmitting faithfully and fully the popular revolt against the rate bills that so many people have been receiving, some of which were greatly increased by the direct actions of his right hon. Friend the Secretary of State for the Environment.
The Government had stubbornly refused to do anything about that. Only last month, when they were defeated in the House on the issue by all the Opposition parties, they still took no action. The Secretary of State for the Environment was to adamant that nothing could be done about this that I understand from at least one of my hon. Friends that he took what I think all hon. Members would regard as an almost unprecedented step for a senior Minister to take. If he did not positively refuse to see one of my hon. Friends about the matter, which affected his constituency, he made it absolutely clear that he was so certain that there was no possibility of doing anything this year that it would be a complete waste of time for my hon. Friend to see him.
That has been the Government's attitude until now. The right hon. Gentle-

man should be honest and admit that what he has done, welcome though it is, is something that has been done in the face of stubborn refusal and directly as a result of strong popular revolt. He must admit that that feeling was transmitted faithfully and fully in the House by the main Opposition and supported by all the other Opposition parties.
The second measure to which I give unqualified and wholehearted approval is the Chancellor's proposal to make an increase in the needs allowance which is used for rent and rate rebates and for rent allowances. It is directly in line with the belief that we held whilst in power, that the right way to deal with the stresses and strains of the hardships which inflation causes is not by huge general subsidies, which give so little to those in real need because their overall cost is so enormous, but by selective grants. That is in direct line with what we were doing when in power. I give an unqualified welcome to the Chancellor's decision to continue that method. It is a method of which I do not always recall him approving when he was in opposition.
I return to my criticism of the mini-Budget. One matter which stands out above all others is the extent to which the right hon. Gentleman has gone into reverse since March.

Mr. Healey: I am slightly overcome by the largesse which is showered on me. The right hon. Gentleman has not mentioned his approval of the relaxation of dividend control. Does he think that I should have kept at the 5 per cent. level at which his predecessor fixed it?

Mr. Carr: Let the right hon. Gentleman be a little patient. Perhaps I should give him a preview. Perhaps I should have done so earlier. I can assure him that I shall be welcoming that relaxation in due course. However, I do not think that he has done enough to help investment. I shall be dealing with these matters later.

Mr. William Hamilton: What about REP?

Mr. Carr: The hon. Member for Fife, Central (Mr. Hamilton) will have to be a little patient. I shall also deal with that matter.
I return to my criticism of the mini-Budget. The first thing that stands out is


that the Chancellor has gone into reverse. In March he charged off in one direction and in July he charges back, slightly less enthusiastically, in the opposite direction. Goodness knows in what direction he will charge if he is unfortunately the Chancellor in October. If this is what is called fine tuning of the economy, I can only think that the economy would be a lot better off with a little less fine tuning and a little more firm judgment and constant purpose.
Let us come to the specific contradiction between the Chancellor in his March mood and in his July mood. First, we have heard quite a lot today and yesterday about the triggering of threshold agreements. He has specifically mentioned that one of the purposes of his measures was, if not to avoid, at least to reduce the triggering of these agreements. In March the direct result of his activities was to trigger them sooner and more often than would otherwise have been the case. That was admitted in the official Press handout about the April increase in the RPI which was announced in May. That increase triggered threshold agreements three times in a single month. That is one enormous conflict.
The second conflict is the effect on prices to which the right hon. Gentleman has also referred. Yesterday he claimed that the eventual effect of his proposals of bringing in indirect savings of labour costs would be to reduce the RPI by about 2½ per cent., but the eventual effect of his March measures, which equally took in all indirect increases in labour costs, was to put up the RPI by about 2½ per cent. to 3 per cent. At best the financial effect of yesterday's measures on prices can barely if completely cancel out the damage which was done to prices in March. Meanwhile, we have suffered three months of prices at unnecessarily high levels. Therefore, thresholds have been triggered sooner and at a greater scale than was necessary by the Chancellor's statements and policies of yesterday.
The third example of specific contradiction arises in the level of the public sector borrowing requirement. In March the Chancellor laid a lot of emphasis on the need to reduce that requirement. Indeed, he made a lot of the specific measures that he was taking to reduce it this year by £700 million compared with what it would

have been without his special measures. On many occasions—for example in the debates on the Finance Bill—the Chancellor has maintained the importance of those reductions, but now he increases the requirement by £340 million. In other words, he increases it by almost half of his much proclaimed reduction.
That is a substantial change. It is fascinating that yesterday he described the increase of £340 million as a relatively small amount. That was not how he described a much smaller possible increase in Finance Bill debates last week. Then a much smaller amount was, he said, a very large increase.
That also undermines the right hon. Gentleman's policy to reduce interest rates. He made clear in his Budget Statement that his ability to reduce interest rates would depend on restricting the public sector borrowing requirement at home. His present policy is a major reversal compared with what he was saying to us and the country in March. It is a reversal of policy on the importance of restricting the size of the public sector borrowing requirement, which brings us right to the heart of the rightness or wrongness of the Chancellor's actions.
The basic question is whether we are in earnest about putting the brakes on inflation. If we are in earnest about that, and about considering whether there should be any reflation at this stage, and if so of what kind, the question must be considered at two levels—namely, the level of the external balance of the economy and the need to maintain international confidence, and the level of the domestic economy, coupled with the overriding need to restrain the inflationary pressures within it.
At the external level one of the factors that the right hon. Gentleman must weigh in the balance is last month's balance of payments figures. They showed a large deficit but it was encouraging, as he said yesterday and today, that although there was a further swing into the red in the second quarter of the year compared with the first, it was happening primarily as a result of oil prices.

Mr. Healey: Only as a result of oil prices.

Mr. Carr: I accept that and I correct myself. That has come only as a result


of oil prices. The non-oil deficit is improving steadily with exports rising at a faster rate than imports. That is very much what the previous Government predicted last autumn. In that sense the economy is still on the course on which we set it. The right hon. Gentleman looks quizzical about that. Perhaps that is not the right way to describe the smile on the face of the tiger. Whatever is the right word, let him look back to the public statements of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) about that expectation.

Mr. Healey: I spent a good deal of time when occupying the present responsibilities of the right hon. Member for Carshalton in looking at my predecessor's statements. I noticed that he always predicted an improvement in the balance of payments position and that that was always followed by a deterioration.

Mr. Carr: That is one of those untrue generalities for which the right hon. Gentleman is becoming only too well known. It is right that the non-oil deficit is decreasing while exports are rising faster than imports. That is a thoroughly good sign.

Mr. Peter Tapsell: I put to my right hon. Friend the Member for Carshalton (Mr. Carr) a matter that has been worrying me for some considerable time—namely, the tendency for many right hon. Members on both sides of the House to draw a distinction between the oil deficit and the non-oil deficit. Are we not to a considerable extent deluding ourselves and our country if we continually make that point? At the end of the day the deficit still remains. We are running a deficit of £4,000 million this year and it does not explain it away to our countrymen to say that the oil deficit can in some way be magically disregarded. That cannot be the position.

Mr. Carr: I should be the last person to say that it can be disregarded. What is valid to say is that it can and should be dealt with, not only by this country but by others, in a different way from the rest of the deficit. That is an important distinction. But if the intervention of my hon. Friend the Member for Horn-castle (Mr. Tapsell) allows me to say that I am in no way suggesting that it can

be disregarded, I am grateful to him. He also gives me the opportunity to say how dangerous it is—and I fear that the Chancellor overdid this last night in his broadcast—to claim the prospect of our own oil as a sufficient reason for not dealing adequately with our problems in the intervening period. If we are not very careful, we shall have mortgaged the future which might come from our own oil before we get it. This is something else that we must talk plainly to our people about. We have an enormous opportunity in North Sea oil for a new prosperity and strength in the future, but that is no reason or excuse for not putting our house in order between now and the time we get it.
Another feature of our present position, despite the large deficit, is that we have drawn very little on our reserve and are financing our deficit by capital inflow. This is a preferable form of deficit financing, if it can be done, but it makes the maintenance of confidence of the greatest importance. It is inevitable, as a result of the oil price increases, that many other industrialised countries will this year be suffering large deficits in their balance of payments and, overall, the non-Communist Western countries are bound to be in substantial deficit.
Rightly, the Chancellor has said that it would be disastrous for each consumer country to try to achieve rapidly an overall balance in its external payments taking into account the oil deficit, because then we should indeed be in grave danger of slipping into a serious worldwide recession. That is perhaps another answer to my hon. Friend the Member for Horn-castle.
It is not a condition of confidence, therefore, that we move immediately to remove that part of the deficit resulting from oil, but confidence in our economy is inevitably bound up with what we are going to do about the non-oil deficit. That is why we must question whether Britain is the right country to go out in front of other countries, whose underlying balance of payments is a great deal healthier than our own, by taking reflationary action, however reasonable our own long-term prospects may be if sensible policies are followed.
All I want to say at this juncture is that it is essential to gain and then to keep the capital inflows which are so


vital. To sustain the level of sterling in order to make sure of maintaining international confidence, it is better to err on the side of caution, particularly at this moment, when the outlook for wage increases is at best so uncertain.
Is it not inevitable that extra consumer demand will, to some degree, affect and drag in more imports as a result of what the right hon. Gentleman has done? Is it not inevitable that, to some extent, this will divert such little growth as we can achieve into consumption rather than into exports and investment? This leads me to believe that, if some injection into our economy is possible with safety at the moment, it should have been made in a substantially different way from that in which the right hon. Gentleman has made it.
This, of course, brings me to the second question the second level of consideration, the needs of the domestic economy. Presumably, the Chancellor is motivated by fear of unemployment. I agree that that is a real fear. I agree strongly also with the right hon. Gentleman when he says, as lie did last night, that he is not prepared to solve our problems through mass unemployment. What we have to ask ourselves is what is the greatest danger to full employment in present conditions. Surely the greatest danger would come from failure to put the brakes on inflation. That is what would lead before long to the most massive unemployment of a kind most difficult to cure, and that is the risk which we must not take.
It is, to put it mildly, not evident that the most serious threat to full employment comes from any general lack of demand in the economy. Indeed, there are still only too many signs of acute labour shortages in some areas and in some industries. Therefore, I would have thought that there was no real case for a general injection of consumer demand at the moment.
There is imbalance of employment demand, and that might justify selective help in the regions. The Chancellor has chosen to do it through the means of the regional employment premium. Views on the REP have always been and will remain conflicting. I still am very sceptical about it. At the same time, I have for long believed that, if one is to have a regional incentive, as I believe one

should, there is a case for that incentive to include a labour-motivated incentive as well as a capital-motivated one. I simply doubt whether the REP is the best or, indeed, a particularly effective way of doing it, but to debate alternatives would not be appropriate now.

Mr. John Smith: If the right hon. Gentleman believes that a labour subsidy is an essential feature of regional development policy, why did the Conservative Government threaten to abolish the regional employment premium and bring forward no proposals for anything to replace it?

Mr. Carr: The hon. Gentleman should be a little more sophisticated than that. Originally, when we were in Opposition previously, I expressed my dislike of the regional employment premium. We had not yet abolished it. The hon. Gentleman should have waited until we abolished it to see whether we had thought of something better to put in its place.
I am still very sceptical about the REP, but if the Government have decided to stick to it, I must ask whether it is wise to double it in the development areas. It seems to me that this accentuates the strongest criticisms of it. It increases the distortion between one firm and another and between one area and another, and one must not underestimate the anxiety which this very big increase will cause, for example, in the intermediate areas.
Therefore, if the right hon. Gentleman genuinely does not see a better labour-intensive subsidy for the regions, if he believes that he must stick to the REP, might it not have been better to spread it to all employees in the develop-men areas rather than to double the rate? I have always believed that this would be more effective. I think that it would reduce the degree of distortion. I have always believed strongly that, in the long run, if one wants to help development area policy, it is at least as necessary to encourage the more labour-intensive service industries as it is to encourage the more, and increasingly more, capital-intensive manufacturing industries.

Mr. Healey: The right hon. Gentleman is giving an interesting thought piece about this issue, and this point is strengthened by what he has said. The Government of which he was a member


destroyed the value of the regional employment premium by saying that they would abolish it in October 1974. As a result, the extent of this incentive could not have affected new behaviour by industrialists following the announcement of the last Government's intention. What I am complaining about is that the Conservative Government, with only six months to go, gave no indication that they intended to put anything in place of the REP, and that this led to a fall in employment in the regions in recent years which need never have taken place.

Mr. Carr: I am sorry, but that is another flight of self-deception or misleading of the House. I have not come briefed to rebut that at the moment. We undertook to discuss the phasing out of REP and my hon. Friend the Member for Worthing (Mr. Higgins) in replying to the debate will gladly give chapter and verse to show that that is a misrepresentation of what we were doing. For the Government to talk about any failure by the last Government in regional policy comes a bit thick.
I return to my main point, namely that are we to do to safeguard jobs in the future. We believe that the main safeguard for jobs in the future lies in a higher rate of investment, and in stimulating demand. The Chancellor of the Exchequer's estimate of the effects of his stimulation of demand are bizzare. From experience I appreciate that this is a vague and difficult area. But the Chancellor has come to the House with a reflationary package, one of the chief motives of which must be his fear of unemployment. To be asked, as he must have expected to be asked, about what the effects of his proposals would be, and to give a confident answer that the effect would be 20,000 jobs by the end of next year and then, the following day, to say that he might be out in his calculation by a factor of five times is most extraordinary—

Mr. Healey: The right hon. Gentleman was not listening carefully when I intervened. I was making the point that the estimate I gave related to the direct effect on unemployment by the end of next year, but the right hon. Gentleman asked about the effect on employment, which, as I pointed out, was a different

question. In answer to the original question which I was asked I mislead the House.

The Prime Minister (Mr. Harold Wilson): The Tories never gave a forecast on employment.

Mr. Carr: That is another argument for the House to consider. [Interruption.] The Prime Minister is wasting time. He has refused to give estimates or to ask for them. This matter will always be a bone of contention.
The degree of stimulation of demand which the Chancellor proposes seems most unlikely to produce the higher figures about which he is talking. The main safeguard to jobs must lie in a higher rate of investment. The lifting of the severity on dividend restraint is helpful, and we welcome it. However, the Chancellor would be wrong to think that REP is much help to investment. Above all, it does not help firms in some of our areas of greatest growth potential, such as the Midlands. If we want to encourage investment we must give industry both cash and confidence. The Chancellor by his measures in March took what industry estimated to be £1,000 million of £1,100 million out of its liquidity in the current financial year, and has since put little back. With regard to confidence, while the right hon. Gentleman has taken away cash, his right hon. Friend the Secretary of State for Industry, by threatening nationalisation and State control, has done a lot to destroy confidence.
If I felt it safe to inject more money into our economy at the moment I would put it mainly into industry. If the Chancellor feels able to increase the public sector borrowing requirement by as much as £340 million, it would have been safer from the point of view of international confidence, more effective in insuring us against the fears of unemployment and more productive in making our economy more competitive and buoyant in the future to have compensated the liquid funds of industry for at least part of what he extracted from it by his measures in March.
But the Chancellor, from the beginning of his term of office, has been too complacent about industrial investment and has underestimated the danger of decline. Only yesterday he spoke enthusiastically


the Government took office—investment of investment in the first quarter, before which was based on decisions taken long before the Government took office. Again today he quotes, with a certain confidence, figures regarding likely investment this year. He does not seem to realise that the real cause for concern should be about future intentions. It is decisions taken this year which will materialise—or not materialise—into investment next year and in the following years. Therefore, we believe that if we are to inject more purchasing power into the economy at the moment there must be a higher rate of investment in industry. This is necessary to safeguard against runaway inflation.
For the reasons I have stated we say that the Chancellor has not lived up to his claim that to deal with inflation was his first and main objective. He has not dealt with it at source. He has done no more than tinker with it and, at best, may produce a few months less pain for our people at the risk of much worse inflation than would otherwise have been the case next year and beyond. We believe that the Chancellor has fundamentally failed to take advantage of the opportunity presented to him and to do his duty towards the country.

5.26 p.m.

Mr. John Smith: Most hon. Members would agree that the right hon. Member for Carshalton (Mr. Carr) was hardly in sparkling form today. The most unconvincing part of his speech was when he was asked a direct question, as well as for his comments, on REP. It is not good enough for a leading Opposition spokesman to offer the defence of not being able to say much about REP because he has not come briefed for the subject. After all, REP was one of the major announcements of my right hon. Friend the Chancellor of the Exchequer yesterday. The performance of the right hon. Member for Carshalton shows a breathtaking ignorance by a leading Conservative spokesman.
I shall remind him of some of the facts of life relating to the last Conservative Government and REP. He may not know that in October 1970 the Conservative Government said that they would phase out REP. They stuck to that

policy throughout the period of their office, although towards the end there were signs that they were changing their minds, in that they were considering some other form of labour subsidy as a result of pressure from, amongst others, the CBI, which submitted a memorandum on the subject in February 1973. The last Conservative Government were committed to phasing out REP and they made no announcement regarding any alternative.
Action regarding REP is one of the most important features of the proposals of my right hon. Friend the Chancellor. We also applaud his plans regarding the cost of living. But for those of us from special development areas—such as my constituency where there is a dependence on the efforts of manufacturing industry—there is a warm welcome for the announcement that REP is to be doubled. My right hon. Friend's proposals mean that REP is to be rehabilitated as an important element of our regional development strategy.
Under the Conservative Government REP was under sentence of death and, as my right hon. Friend the Chancellor pointed out in an intervention, its value as an incentive was discounted because industrialists knew that it was likely to come to an end. They did not therefore take account of it in their calculations on where to site their industries. To that extent we were not getting the full value of public investment made in REP. At the same time the value of the premium was steadily being eaten away by the process of inflation. The premium was fixed in 1967 and its value by now is at least 50 per cent. down. It was fixed in 1967 at 7 per cent. of the average wage in manufacturing industry.
My right hon. Friend's announcement that REP is to be doubled will have the effect of at least restoring it to its 1967 value. REP is to be rehabilitated and industry moving into new areas can rely on it as an essential feature of Government regional strategy. Its value is to be restored. In simple terms it will mean that another £100 million will be going to development areas. As a Scottish Member I am particularly glad that it is to be doubled because that will mean another £40 million for Scotland. Because of its higher number of labour-intensive industries Scotland has always got the largest share of the regional employment


premium. The £40 million is a welcome addition to the profitability and liquidity of Scottish businesses. I am sure that my hon. Friends from the other development areas share my satisfaction over the Government's decision. I am sure that it will be widely welcomed outside the House by both sides of industry.
To my mind the most curious feature of the argument about the premium is that the only people who have been unconvinced of its merits have been those within the Conservative Party. I have mentioned the Confederation of British Industry. It felt so strongly about this that it wrote to the Prime Minister in February 1973 and produced a most convincing memorandum showing the value of the premium, both in creating jobs in development areas and, perhaps more importantly, in holding back the rundown in employment in development areas.
The TUC has campaigned for the premium all along and has urged the Government to retain and increase it. The Trade and Industry Sub-Committee of the Expenditure Committee reported in the last Parliament in favour of the premium. Perhaps the most important thing it did was to take evidence from leading British firms as to whether they favoured regional employment premium. Among the firms which argued for it were Chrysler. Thomas Tilling, Guest Keen and Nettlefolds, Plessey and Dunlop.
Many of these firms have important factories in development areas. The officials of the Department of Employment who gave evidence to the sub-committee claimed that if we abolished the premium we might lose between 20,000 and 50,000 jobs in development areas. That is something which the right hon. Member for Carshalton, who was concerned with labour affairs when in Government, ought to have known.

Sir John Hall: Does the hon. Gentleman find it surprising that the firms he mentions should be in favour of regional employment premium when it has given so much to their cash flow, irrespective of whether it has had any effect on encouraging additional employment?

Mr. Smith: The evidence given to the sub-committee was that the premium did have an effect on employment and upon decisions about the location of industry. The hon. Member may be cynical about the evidence given by British industry. I am prepared to take it at its face value. If the companies say that it benefited them, I will not say they are liars. It strikes me as odd that Conservative Members should be suspicious of evidence given by British industry.
This is not just the attitude from one side of industry. Both sides think the same. It comes from Government Departments and from everyone who wants a balanced regional development policy. The only people, apparently, who are still unconvinced are those in the Conservative Party, although I thought that there were signs of a conversion in the right hon. Gentleman's remarks. It is a reasonable deduction that if the Conservative Party had won the last election REP would not now be in the process of being doubled. It would be in the process of being completely phased out. The result would be that the development areas would be losing £200 million and Scotland in particular would be losing £80 million.
The advantages of REP are clear. It introduces a strong element of labour subsidy into our strategy. It means that firms which want to qualify have to employ people. One of the dangers with development area strategy has been that it has been too capital-intensive. Large amounts of Government money have gone into big capital-intensive projects without producing very much by way of local employment. The regional employment premium has an important balancing effect. It means that if the Government are paying out a lot of money it is at least being related to the creation and retention of jobs.
The premium benefits large firms as well as small ones. During the recent difficulties I know that many small firms—I have talked to some in my constituency—found the premium a useful prop to their liquidity. It encourages them to keep labour when they might otherwise be tempted to shed it. It is of equal value to incoming and existing industry. That is one of the problems


with regional development policy. Sometimes we favour incoming industry at the expense of existing industry, which has been doing a good job in difficult circumstances and preserving employment. It is the existing firms, the older-established firms whom I have found are most keen on REP because it is the one benefit they share with incoming industry.
If this were not enough, all the academic studies of REP show that it has had a marked effect on the creation and retention of a high level of employment in the development areas. I refer specifically to the work of the Department of Applied Economics at Cambridge which has done a considerable amount of research on this, and a pilot project carried out in Northern Ireland in cooperation with the Confederation of British Industry. It is from these studies that the Department of Employment accepted that the minimum job loss if REP were abolished would be 20,000 jobs, possibly rising to as many as 50,000 jobs.
I am glad that, as a result of the Labour Government's decision to retain REP and to double it, we shall not only prevent a potential job loss but look forward to increased employment as the money works its way through the development areas. As a Scottish Member, I see this as part of a general strategy of the Government. In the past two to three weeks there has been a succession of decisions of benefit to the Scottish economy. The Offshore Supplies Office of the Department of Energy is to be sited in Glasgow. The headquarters of the British National Oil Corporation is to go to Scotland. There has also been the announcement of the creation of the Scottish Development Agency, to use the revenue from North Sea oil to sponsor the re-creation of the industrial heartland of Scotland in the West and to improve the environment of that area. We look forward to an important announcement on the dispersal of Civil Service jobs in the reasonably near future.
It is clear that the Labour Government are putting regional development and regional growth and prosperity hight on the priority list of tasks to which they have set their hand. We in Scotland, and I am sure my colleagues in the North of England and other development areas, are most satisfied about this. One of

the great differences between the Labour and Conservative parties is that the Labour Party is genuinely and sincerely committed to regional development and prosperity. It is one of its major priorities. We do not just talk about it, we do something about it—as is evidenced by the decision on REP.
The Government were right to double the rate for the premium. The time is now ripe for a wider study of the rôle which a labour subsidy ought to play in our regional development strategy. For instance, there is a case for asking whether it should be extended beyond the bounds of manufacturing industry and into service industries. Those of us representing areas of high unemployment who are constantly looking for new firms to go to our areas have noticed that it is often the service industries which provide more jobs than manufacturing industry. Manufacturing industry tends to be more automated. I am glad that the right hon. Member for Carshalton mentioned this. It was one thing he did know about REP and that is important.
There is scope for considering whether we should widen the system of labour subsidies and apply it to other industries. It is time to decide whether REP is the best way I am wholly committed to some form of labour subsidy because a capital subsidy alone is nonsense. There is, however, room for argument about whether REP is the best way of providing this subsidy. Let us study this. We shall not study the problem if the premium is under sentence of death. It is better to put it up to the level intended in 1967 and, while maintaining this important support to the regions, we can set about examining the best way of creating a labour subsidy.
There must be a labour subsidy if employment and the maintenance of employment are to remain part of the central strategy for regional development policy. Because the Chancellor's announcement reinforces and strengthens the commitment of the Labour Government to prosperous development of the regions, entitled to their full share of the economic benefits and prosperity of this country, we welcome what he told us yesterday. I welcome his announcement, on behalf of my constiuents who live by manufacturing industry in a special development area. People who work in


the factories and those who employ them will welcome what my right hon. Friend has done. Much more than that, all of business will welcome the sensible, courageous and forward-looking decision which emphasises the Government's commitment to regional prosperity.

5.40 p.m.

Mr. Edward du Cann: I have total sympathy with the local patriotism of the hon. Member for Lanarkshire, North (Mr. Smith) in his wish to do well for his constituents. I am sure that the whole House shares that sympathy. On the other hand, he is wrong to assume that he individually or the Government have a monopoly of good will in this matter.
We have had a good deal of discussion about the regional employment premium. All my experience leads me to believe that special incentives are of vastly less value in encouraging employment in the development areas—the hard-pressed areas—than is a generally high level of economic activity. The hon. Gentleman was right to make a case for the service industries and to say that the dispersal of offices from London is perhaps one of the most important and significant acts of aid which any Government can give to the regions.
To turn to wider matter, it was a matter of particular disappointment to us all on both sides of the House that in his substantial speech today and in his announcement yesterday the Chancellor of the Exchequer mentioned inflation only once. On the other hand, my right hon. Friend the Member for Carshalton (Mr. Carr) began his speech with a substantial and strong reference to inflation. How right he was.
Inflation is the enemy. I do not say that in our society there is no other. I should not be a West Country man if I did not believe ardently in the cause of reform, but I say that inflation is the chief enemy, the most insidious, the worst, and the most evil. It disturbs values, imposes burdens on the weakest, makes for injustice and is disruptive of our society. Its course is never new. It alarms capital, so sorely needed to be put to practical work, and diminishes legitimate enterprise. It encourages, as we have seen in the property world par-

ticularly, malinvestment, thriftlessness and speculation, all at the expense of production.
The cumulative arithmetic of inflation is terrifying. At "only" 10 per cent., a phrase that is sometimes used abroad, prices double in seven years. At 15 per cent. prices double in five years. The current rate is higher. With continuing 10 per cent. inflation a man earning £40 a week at the age of 25, if his real income is to rise annually by no more than 2½ per cent., a modest enough target, surely, on retirement at age 65 would be earning no less than £250,000 per annum. A pensioner retiring at 65 on the basis of two-thirds of salary will find it worth only one-sixth by the time he is 80.
I speak as one who has responsibilities in managing pension funds. I warn the House that if inflation continues at present rates most funds in this country may not be able to meet their obligations. Our recent record of inflation is the worst of all of the countries in OECD.
Does anyone recall these words of Mirabeau in 1788? They were not written of inflation but might have been. He said:
a misery of tyranny, corruption and delusion, a veritable debauch of authority in delirium".
Those are strong words, and I quote them deliberately, for Mirabeau, who might have been the saviour of France, changed his mind and lost his way, as I feel that we in this country may have done. Never was there in that period of history a French parliament with abler or more patriotic men—as there are in the House of Commons now—yet disaster struck all the same.
It is fair to judge any Chancellor by the deligence with which he intends to contain inflation and the success he is seen to have. I no more accept inflation as an inevitable human condition than I accept poverty or unrelieved misery. The House of Commons does not and will not tolerate the latter. It must not tolerate the former. It is possible to have some sympathy with the Chancellor in one respect. The fear that the present sluggishness of the British economy will lead to recession in 1975 is widespread and genuine. That it exists is perhaps a criticism of the Chancellor's Budget judgment of four months ago, but the need, surely


is to increase investment rather than consumption for its own sake.
I do not believe that the people who work in industry and commerce are idle. They are not. They work harder and more loyally than do workers in any other nation in the world. They are certainly over-disrupted, but that is another subject. The point I am concerned to make is that they are grossly, wantonly and disgracefully under-capitalised, and the economic race will be won by those nations which bring the maximum capital to the worker's elbow.

Mr. Frank Hooley: I agree substantially with what tile hon. Gentleman has just said, but is he not aware that under the Conservative Government investment rose not at all in the three years between 1970 and 1973?

Mr. du Cann: I am less concerned to make party points than to talk of the future and of what it is necessary to do now. To increase investment it is necessary to achieve a satisfactory level of business confidence, which in turn depends on a sympathetic climate of opinion of which the Government of the day, whatever their colour, are the arbiter.
In this respect, in their regard for the essential national interest, the Government's carelessness borders on the criminal. We are accustomed in politics to the experience that the only certainty is uncertainty. It is the duty of the House and the Government not to create uncertainty for those who have practical work to do. Yet there are many examples. Look at the uncertainty in pensions, look at the uncertainty about defence orders, look at the almost wanton destruction of the property market by successive Governments, look at the threat of State ownership hanging over so many sectors of British industry, look at the change in banking controls—one moment one does not see them and the next one does—look at the vagueness in the control of insurance companies. I have interests in banking and insurance.
This on-off philosophy will not do, whether we speak of Maplin or the Common Market. I have always had my reservations about the latter, but, the House having taken the decision to go in, for heaven's sake let us work to make a

success of it. Do other hon. Members reflect, as I do, that the greatest need in our country is to bring a degree of certainty and stability into our affairs so that businessmen and traders can plan ahead? In my adult experience we have suffered too much in the way of change which is often wrongly dignified with the title of reform.
How do we encourage the manager, the entrepreneur, the risk-taker in Britain today? We tax him higher than any of his overseas counterparts and, for good measure, promise him additional discouragements in the autumn. "Let him try to save some money", we say. "Let him accumulate capital." But we will not have that. In their sum, the intention of the Chancellor's measures is clear. It is the total erosion of private savings and their transfer into the hands of the State. Not for the first time I am reminded of the experience of M. Voltaire when he visited London for the first time and was dismayed at hearing that the Royal Navy had shot Admiral Byng—"…pour encourager les autres", remarked Voltaire. How does one encourage people if one constantly discourages them?
Has the Chancellor seriously considered how his personal taxation policies encourage inflationary expectations? For example, a man whose money income rises finds himself forced into paying at a higher tax rate. The average wage earner needs an increase of 13 per cent. or more in gross remuneration to keep him in the same position after a 10 per cent. rise in prices. At higher remuneration levels the figure will be 30 per cent., 35 per cent. or more. It is surely time to consider seriously the indexing of all fiscal norms if taxation is to be socially just; but the most socially damaging aspect of all in the economic scene is the expectancy of inflation.
The index of basic wage rate rose 3 per cent. in June, or 16 per cent. above the level of a year ago. There is now a fear of a wages explosion, added to by the "news" on the tape this afternoon. It is not surprising that many of our fellow citizens hade a real fear of inflation—inflation which the Chancellor mentioned only once in yesterday's statement. A Chancellor who seeks to reflate the economy in those circumstances does not so much to discourage inflation as encourage it.
How unhappy a spectacle it is to see authority plan to aggravate or cause in the long run the very evils which it seeks to avert or ameliorate. I know as certainly as I am standing here that the result of the Chancellor's actions in the long run must be to increase rather than decrease unemployment.
Sometimes foolish men wish that they could foretell the future, but what is foresight? Is it mere knowledge of economic forces and laws as revealed by history? History shows that inflation either will be controlled in this country or will rise to pre-war German proportions.
What is to be done? There is no single remedy. Since the fashion in the House is for abbreviation and short speeches, I am concerned to do two things only. Above all, I wish to point to the danger of inflation, to state it, to restate it, to shout it if need be again and again till all listen.
I should like now to make a pair of complementary recommendations to the Chancellor. He has a clean sheet on which to draw his strategy. I wish him success, for his triumph would be our country's welfare and prosperity. With his able lieutenants to help him, he should set a style which would be an example to his country.
The first is a practical matter simply stated. Let us get better value from all Government expenditure. I truly believe that not less than one-eighth—and perhaps more, as much as one-sixth—of all Government expenditure is wasted, or badly spent. Much of this money could be saved. I have, if I may mention it, an unusual experience in this House since I was the first Chairman of the Public Expenditure Committee and I am now Chairman of the Public Accounts Committee. I speak not like the academic economist to whom the Chancellor referred and on whom he spent so much time amusing himself. I speak from what I know and from what I am sure is so. For less money we might well have services at least the equal of the present, if not better.
It is so easy to say. I do not pretend it is so easy to accomplish. It requires readjustments of habits, styles, methods and the like, but, when achieved, it must substantially relieve the inflationary pres-

sure on the British economy. It would permit vastly lower taxation. The fact that the nation's housekeeping were obviously well done would be the greatest economic encouragement to our people yet, in the years since the war. It can be done. Let it be done.
My other recommendation is also simply stated. I can put it to the Chancellor in three worlds: tell the truth. Tell our people what we can afford and what we cannot. Tell them that there is no lasting substitute for honest endeavour. Tell them that he who borrows in the end must repay. Point out that the man who takes more from the community than he creates is a man who would steal from the weakest in our society.
Encourage the producers—tell people that investment can come only from surplus on trading, and that profits are to be welcomed when honestly earned, and that we believe in high profits, high wages and a high investment economy. Teach our people the need to create new wealth before we discuss how to share it better. While being solicitous for those at the bottom end of the living scale, encourage those who will be the winners in the fierce trade battle that exists international-ally. Tell our people that their destiny is in their own hands, for better or for worse. My hon. Friends and I insist that it shall be for the better.
I am an optimist. The opportunities for our country are as vast and as exciting as the climate of opinion is gloomy. The need for us all is to raise our mental sights not a little but a long way. It can be done, given the right political and economic leadership. My regret is that the Chancellor of the Exchequer's measures yesterday seem to me, in this crucial scene, to be a mere trivial irrelevance.

5.58 p.m.

Mr. Giles Radice: I welcome the statement made yesterday by my right hon. Friend the Chancellor of the Exchequer. It contains a number of useful measures, both to slow down the rate of inflation and to ward off possible increases in unemployment in the year ahead.
As a Member for a northern constituency, I particularly welcome the doubling of the regional employment premium.


With other hon. Members, including my hon. Friend the Member for Lanarkshire, North (Mr. Smith), I have argued for some time for that measure and for an increase in its value.

Mrs. Elaine Kellett-Bowman: Will the hon. Gentleman give way?

Mr. Radice: No, I will not do so yet. It is well known that the value of REP in real terms has been halved since its introduction in 1967 but that is not the main argument for increasing the REP now. The real case for increasing it now is that at a time when this country faces an unprecedented level of inflation as well as the prospect of increasing unemployment, an increase or doubling of REP offers the quickest and most effective way available of protecting directly those areas which are always worst hit when unemployment increases.

Mrs. Kellett-Bowman: Will the hon. Member now give way?

Mr. Radice: Just a moment. That applies to the North, Scotland and Wales without overheating the rest of the economy. All the evidence, including statements made by a number of leading firms to the House of Commons Expenditure Committee, indicates that, despite the effect of inflation on the value of REP, many firms in development areas have come to rely on REP as an important factor in their profitability. In terms of job creation, between 1968 and 1970, REP created between 20,000 and 50,000 new jobs, and my right hon. Friend has estimated that his total package, including REP, will result in about 120,000 new jobs.

Mrs. Kellett-Bowman: Will the hon. Gentleman accept that not only the North can be assailed by unemployment? Does he realise that the North-West is badly assailed, and that the intermediate area and the North-West will suffer very badly as a result of this doubling of the rate of REP? The hon. Gentleman said that it would not hit the rest of the economy, but it will hit places such as Lancaster very hard. Does he not appreciate that it is a policy of robbing Peter to pay Paul?

Mr. Radice: The hon. Lady has made a very good constituency point—

Mrs. Kellett-Bowman: The effect on my constituency is a by-product of the effect on the North-West.

Mr. Radice: I have no doubt that the hon. Lady's point will be noticed in her constituency.
The whole point of REP is that it is selective between certain areas and others. It is because of this that it has the effect that has been observed.
REP is not only useful in creating new jobs. It is also useful because it is an overall subsidy to all manufacturing industry in development areas, and it protects existing jobs. It is probably this side of the increase in REP which will be of most value during the coming months. The TUC has estimated that the total package, including the REP especially, will save up to 200,000 jobs during the coming year.
I am not arguing that REP is a perfect instrument. It is both too general in that it applies to all manufacturing companies, whether or not they are efficient, and yet too narrow in that it does not apply to the service industries. It is therefore right that the Government should be looking at alternatives. But the fact remains that altering the value of the REP is the only method that my right hon. Friend had of protecting jobs in the regions, and that is why Government supporters welcome that measure very warmly.
It is accepted on both sides of the House, I think, that the main—perhaps the overriding—problem facing the country is the rate of inflation. Inflation at the level that we have at the moment is not only socially divisive—not only does it redistribute towards the rich away from the less well-off—but it could, if it persisted at its present level and rose to South American levels, undermine the democratic basis of the country.
Since coming to office, this Government have taken a number of important steps. They have frozen the level of rents. They have introduced food subsidies. They have put pressure on distributed profits. Now my right hon. Friend has reduced the level of VAT. However, there are a number of powerful inflationary factors in the economy—the increase in oil and other commodity prices—which have been working through the economy, and


these have been accelerated by the threshold agreements.
I have been in favour of threshold agreements but that was when inflation was at a very much lower level, and there is no doubt that at the moment the threshold agreements are acting as an additional inflationary factor. These are the problems facing us.
As for incomes, the main part of the Government's strategy is based on the social contract. Members of the main Opposition party spend a lot of time carping at and criticising the social contract before it has come into operation. But what would they put in its place? Would they have higher unemployment? Surely their experience in 1971 and 1972 ought to have warned them off that course. We now know that, without an entirely unacceptable level of unemployment, we cannot get an effect on the rise in prices in that way.
Would they have a statutory incomes policy? The Labour Government tried this in 1966 and 1967 and it led to a bottling up of pressure which burst through when the statutory controls were removed or reduced. The previous administration's disastrous statutory policy led to a major confrontation with the unions, a three-day week, and that Government's defeat in the General Election.
I have, as a research officer with the General and Municipal Workers' Union, worked under the incomes policies of both Conservative and Labour Governments. It is my conviction that a voluntary policy based on consent is the only policy that has a chance of success. I believe that the TUC's voluntary commitment to restraint in wage demands is one of the most hopeful experiments of recent years.
Instead of the carping that we get from the Opposition, I believe that the social contract deserves the support of all parties and all groups in society, including the trade unions. It must get that support.
I make two points in conclusion. I believe that there is now a widespread public demand for a clear lead on the economic problems facing the country. People want to know the facts about the economic situation. They also respect those who, like my right hon. and hon.

Friends, are prepared to put the issues clearly before them.
I deplore those, especially those amongst the fraternity of professional economists, who adopt a fashionable doomsday approach. It is one thing to face up to reality. It is quite another to imply that we do not have the intellectual, social and political capacity to overcome our problems. Despite the difficulties facing us, I remain optimistic about this country's future, provided that we in this House have the courage to give the lead that is expected of us.

6.7 p.m.

Sir John Hall: It is an interesting fact that the speeches which we have heard so far from Government supporters have been devoted largely to the subject of regional employment premium. The hon. Member for Lanarkshire, North (Mr. Smith) devoted the whole of his speech to the subject, and the hon. Member for Chester-le-Street (Mr. Radice) also devoted a good part of his speech to it. For that reason, before going on to the more general matters that we are discussing today, I wish to make a few comments about REP arising from my own experience.
I am the chairman of a group of companies which, as it happens, is located in a development area. We have been beneficiaries of REP ever since it was first introduced. I have been interested to see what effect REP has had on employment and on the encouragement of new industries into development areas.
I find it very difficult to get any hard evidence about the really beneficial effects. It is hard to put a quantitative figure on the number of jobs which it has created. I do not think that anyone can say accurately how many new jobs have been created by REP which would not have been there but for it. Nor is it easy to discover how many new firms have gone to development areas encouraged by the existence of REP. There are many other reasons. In my constituency, for instance, the employment situation is such that there are five or six times as many vacancies as there are unemployed. In consequence, firms are seeking to move away to development areas where there is more labour available. They would move to those areas whether or not REP existed. They are searching for labour.
My real objection to the use of REP is its wasteful way of achieving a desirable result. We are trying to build up economic activity in development areas, but, in doing so, we are providing a subsidy for firms which have been there for years and would continue to be there and to employ labour with or without the subsidy.
I have argued in the past that it would be far better to spend the money which we spend on REP on improving the infrastructure of the development areas—building roads, improving services and making places more attractive to industry. We would not then have to give subsidies to persuade people, sometimes against their better economic judgment, to move their enterprises to those areas.

Mr. John Smith: In North Lanarkshire and West Central Scotland the infrastructure has been drastically improved during the last 10 years. We have a very good road and communications system. Yet we still lack a spark of growth in economy in that area. It seems to me from that experience that the infrastructure is far from enough. We need direct assistance and benefit to industry. Building roads is only part of the problem.

Sir J. Hall: I agree that that is not sufficient by itself. We still have areas which, for a number of reasons, are not attractive to industry because they are regarded as uneconomic, whatever inducements may be given. REP will have no great effect in encouraging boards to change their policies in that respect. REP is a wasteful way of achieving a limited result.
I will now turn to other aspects of the general debate on the economic situation which we are supposed to be having today and tomorrow. Referring to yesterday's mini-Budget, I admire the Chancellor's dexterity. This neat injection of reflation, presumably designed to induce a temporary euphoria in the electorate in anticipation of what I assume is likely to be an early General Election, is enough to take the Government over that phase until we get the awakening which will be preceded by the autumn Budget about which we have heard.
Some measures in the Budget I welcome, as did my right hon. Friend the Member for Carshalton (Mr. Carr). I

welcome the introduction of domestic rate relief. As my right hon. Friend said, there was considerable pressure from both sides of the House for something to be done to relieve the pressure of rates which has been imposed in the last few months upon domestic householders. My fellow Buckinghamshire Members and I have made representations to the Minister on more than one occasion drawing attention to the hardship that has been caused in the country. Therefore, we are gratified that this action has been taken by the Chancellor. Had the Government not entirely reversed the action taken by the previous administration which gave differential grants to different parts of the country, we in Buckinghamshire would not have had to press for this relief because it had already been given.
Although I welcome the relief which has been given to ratepayers, I still think that, against the background of this debate, it should have been offset by variable grants, by a reduction of public expenditure in other directions, or by an increase in taxation in one form or another, not given as an additional contribution towards the demand factor.
I welcome to a limited extent the decision to abolish VAT—to reduce, not abolish VAT; it was a slight Freudian slip—only because it has a small temporary effect on the cost of living. But I wonder how far it will go.
The problem of working out 8 per cent. VAT on items of small value will be considerable. Shopkeepers will be confronted with a difficult problem. I fear that the difference may be taken up by increasing the retailer's or the wholesaler's margins. For example, many items produced by my firm are sold at between 15p and 20p. It is difficult to add 8 per cent. VAT to such items compared with the old 10 per cent. VAT. The calculation will not be easy for the shopkeeper. I do not necessarily oppose the reduction of VAT, but I think that it will contribute to the inflationary trend at a time when we want nothing that is likely to do that.
My right hon. Friend the Member for Taunton (Mr. du Cann), who made such an excellent and distinguished speech, drew attention in his closing remarks to the fact that this Budget is completely irrelevant to the situation now facing us. Like all doses of inflation, it will give


pleasure to some, but in the end the national health will be worse than it was. It reminds me of the old rhyme about the Queen of Spain, which will be known to many of my older colleagues. For those who do not know it, perhaps I may repeat it:
It's a hell of a life ', said the Queen of Spain,
'Five minutes pleasure and nine months pain,
A few weeks rest and you're at it again.
It's a hell of a life', said the Queen of Spain.'
I think that the pain that will follow this Budget, if we are unfortunate enough to have a Labour Government again after the General Election, will last far longer than the nine months to which she was referring.
One is sometimes forced to ask whether Socialists have a vested interest in encouraging inflation. Indeed, I am encouraged to ask that because of a comment made by the hon. Member for Chester-le-Street. He pointed out that continuing rapid inflation is bound to destroy private enterprise and to destroy parliamentary democracy as such. I should have thought that those objectives would be welcomed by many members of the Socialist Party, but not, I trust, by the Government Front Bench who are no doubt trying to introduce policies which, mistakenly, they think will prevent that evil overcoming us.
In the belief that there is a real desire to deal with inflation, which my right hon. Friend the Member for Taunton said was the most important problem facing us, I should like to make a few suggestions covering not only the immediate future but I hope the much longer term.
The danger which always faces us when we discuss these matters in confining ourselves to the current year or perhaps a year or two ahead and not thinking of the developments which are likely to take place some years hence, Once result is that we tend to be overtaken by events.
It is platitudinous to say that inflation is worldwide. What is a platitude but a truth that we are tired of hearing. Basically the reason is the rapidly increasing world population demanding an ever-increasing standard of life, using

resources at a faster rate than they can be produced or won from the earth, and using some basic materials at a rate which will exhaust known reserves by the end of the century.
I put down a Question asking about the fate of certain essential metals and how long known reserves were likely to last. Although the answer that I got from the Minister was very cagey, it is clear that, as far as we know, existing reserves will not last longer than the end of this century. After that period we shall be forced either to do without them or to have found substitutes.
It is estimated that the world population will double by the end of the century to 6,500 million and double again in the following 40 years unless we have any disastrous wars or cataclysmic natural disasters. It is unrealistic against that background to expect that the cost of food and other essentials of life will not increase, whatever technical advances we may make in the meantime.
For example, water, a commodity that we take for granted in this country, will be in short supply before the end of this year. The Water Resources Board estimates that, by the end of the century, there will be a deficiency of over 12 million cubic metres a day in the public water supply. Although there may be alternative methods of making good that deficiency, energetic action to develop them does not seem to be taking place.
Over the long term, the essentials of life are bound to get dearer. With the great mass of increasing population in the undeveloped countries naturally demanding improvements in their standard of life and a greater share of the diminishing and inadequate world resources, it is inevitable that the standard of life of those in the more advanced countries in the western world will be reduced. It is not just a question of our standing still.
All Governments in this country have been at fault in creating in people an expectation of a continuing improvement in their standard of life and in disguising the vulnerability of our position. A good example of this is the shock we had when the oil-producing countries suddenly increased their prices so considerably, with the almost immediate result that our standard of life was reduced.
As in most countries which import a great part of their requirements, inflation in Britain can be imported or internally generated or a combination of both. World commodity prices, which are responsible for the greater part of imported inflation, may level off in the short term—indeed, there are some signs that in some respects prices are now levelling off—but if the population trend estimates are anything like accurate, those prices are bound to rise with increasing rapidity in the long term.
That applies particularly to food. At present, the production of food stocks is not keeping up with the increase in world population. That may not seem a matter of great concern to us at the immediate moment, but it will be as the years go by. Although there may be temporary surpluses, generally because of faults in distribution or artificial interference with distribution, in the long run the production of food stocks, without new techniques which have yet to be developed, will lag behind the demands of an increasing population and must affect food prices in this country.
Our agriculture is in a parlous state, I have just received a deputation from my local branch of the National Farmers' Union who pointed out the inevitable increase in the price of home-produced meat as up to the present time it has been a very poor hay year, the fact that they will have to buy a large quantity of feedingstuffs at high world prices, the fact that they have ceased many of their activities and reduced many of their herds will all have a marked effect on the price of foodstuffs produced here this year and next. Unless additional help is given to the industry the situation could get even worse.
We have to regard the fight against inflation as seriously as we regard a war. It can be as dangerous and as destructive in its social effects as any war. To offset the effect of inflation, if we are serious about trying to cure it, we must introduce measures to encourage food production as we did in the last war. This does not seem immediately relevant, but if we look far enough ahead we see how relevant it is. We should encourage people to grow food in their gardens, start allotments again and bring back into production land which has gone out of production. We should try to make ourselves much less dependent on food imports.
We should also examine the philosophy behind food subsidies, which have always seemed to me a wasteful way of giving help to comparatively few people. They are indiscriminate in their effects and, because they disguise the true cost of food, they are bound to lead to waste of scarce resources. As a matter of urgency, we should encourage the reclamation and recycling of products which use scarce materials. As I have said many times, we should reduce our dependence on imported fuel as quickly as possible and should particularly press on with the search for fuels which will make us less dependent on fossil fuels.
Internal inflation, given a determined Government and a people willing to accept the rule of law, should be easier to control than imported inflation. I go back to my earlier question, whether there is real seriousness about dealing with this problem. After all, inflation is of great value to Chancellors. They are reluctant to give it up because it increases the yield from income tax and surtax by pushing people into higher tax brackets. They obtain, both through corporation tax and through capital gains tax, a tax on profits which are non-existent—paper profits which result only from inflation. Inflation reduces the amount of outstanding debt in real terms. Even the most recent of the Government-sponsored loans are a fraud on the public because the rate of interest does not enable them to keep pace with inflation.
For various reasons, then, inflation is not entirely frowned on by a Chancellor. It enables him to do things without the people being aware precisely what he is doing. But if any Chancellor could steel himself to surrender those advantages, he might examine the possibility of introducing indexation over a wide field. My right hon. Friend the Member for Taunton referred to one form of indexation when he talked of indexing the tax scales, but I think that it should go even further.
We already have indexing in a crude way in threshold agreements and the TUC has apparently accepted the principle indirectly by agreeing to try to restrict wage demands to a figure which increases, point for point, with increases in the cost of living. I would not suggest that indexation is a cure-all; it is only the lesser of two evils. It is better than the present bad management of money.
Indexation would be likely to induce a greater sense of security among the wage and salary earners, it would tend to remove the fear at the back of many extravagant and extortionate demands by various sections of the community and increasingly to lessen the pressure for wage demands when people began to realise that the real value of their earnings was protected. It would also reduce the revenue obtained by Government through inflation and might therefore give them less incentive to inflate.
To be effective, indexation must be comprehensive, covering wages and salaries, fees, social service benefits, tax scales over the entire range and future savings. Its one fundamental weakness is that it cannot protect past savings. I do not know how we can do that.
We should also have to introduce inflation accounting. This system is too complex to discuss in a short speech, but I know that the advantages—

Mr. Speaker: Order. The hon. Member has already been speaking for 21 minutes.

Sir J. Hall: I apologise, Mr. Speaker. I will draw my speech to a close. I so rarely speak in this Chamber that I have been led to speak longer than I intended.
The advantages and disadvantages of the system are as well known to other hon. Members as they are to me. If one were to introduce it one would need to take adjustments into account no more than half-yearly.
In response to your appeal, Mr. Speaker, I will refrain from continuing with something I wished to say on that subject, and perhaps hon. Members will forgive me if I jump immediately to the last point in my speech. The dangers facing us are very real, as everybody understands. They will get worse unless we take determined action, explaining to people exactly what we are facing. As my right hon. Friend the Member for Taunton said earlier, we must tell the people the truth. Our problems cannot be solved by electioneering Budgets such as we have had or by party policies which alienate large sections of the population, whichever party's policies are concerned.
I do not believe that the dangers which face us, which are perhaps more serious

and far-reaching than most of us are prepared to admit, are likely to be solved by any one-party Government. To deal with these problems successfully we have to have a policy which is acceptable to the vast majority of people in this country. Whilst I do not feel it realistic to expect that we can evolve any form of national policy this side of a General Election, if we do not do so afterwards I shall be apprehensive for the future.

6.31 p.m.

Mr. William Baxter: I listened with great interest to what was said by the hon. Member for Wycombe (Sir J. Hall) and I heartily endorse much of what he said. I agree with him that the dangers which beset our country at the present time are very grave.
I recall the words of the right hon. Member for Taunton (Mr. du Cann), who delivered what was in many respects a very fine speech, that the responsibility of each Member of this House should be the search for truth, irrespective of whether it helps our party or ourselves. It is one of the great calamities of this Parliament in which we have the honour to sit, that we are apt to forget our responsibility to a greater or higher cause, the cause of truth. I would hope that the right hon. Gentleman's words will be re-echoed in the hearts and consciences of all hon. Members of this assembly.
Let us not blame one another for the problems we have created over the years since the war, but rather let us try to find solutions to those problems. I would hope that in the years that lie ahead succeeding Governments will resolve to try to follow that line of approach. This will be the last Parliament in which I shall sit and I wish to make it abundantly clear that if there is one thing in which I have been disappointed it is the terrific amount of time we waste in blaming one another for faults and failings which actually rest in ourselves. Whenever we change the sides the tune changes accordingly.
The right hon. Gentleman said one of the principal problems that has confronted this country for many years but is now gathering in momentum is the problem of inflation. There can be no doubt of that. I can claim that in every speech that I have made in this House,


though I may not have made many friends on my side, I have tried to draw attention to the great problems that confront us. We have never got down to trying to solve them because we are hidebound by out-dated ideas and ideology.
We have failed to realise that we have to play a rôle different from that which our fathers and grandfathers had to play, and that is because of the changing nature of the world in which we live. I well remember that when I was a young man in a county council 42 years ago honest and sincere men were diametrically opposed to many of the things that we all take for granted today. They were sincere and honest enough, but we have seen a transformation in the whole outlook and basic principles of the life of man. We have failed to realise that the scientific and technological advancement of man has far surpassed and gone beyond the political thought or political aspirations of man. This is the calamity which we see enacted before us, that we who seek to be leaders of men are hidebound by out-dated ideas and concepts.
Today we have listened to speeches from hon. Members on both sides of the House that are of very little moment or importance and are not worth the paper on which they will be printed; nor, I have no doubt, will mine be. But we have the great honour and responsibility to chart the course of the ship of State. I can only puff a little wind behind or against it, as I feel inclined, but we have this great responsibility, this great opportunity, that does not come to the lot of many men, to make a great mark in the history of the human race. I do not see it being done by either side of the House.
There is, therefore, a need for a new look, a new belief, a new concept and a new inspiration, if we as a nation are to go forward and uplift our people into a higher realm of responsibility based upon the principle enumerated by the right hon. Member for Taunton—truth. Whether it hurts us or is in our favour, truth should be the predominating issue in this great and wonderful assembly.
What have we seen in this great new Budget that was to rectify the wrongs that have afflicted us for so many years past? One penny off the pound. Will that have any impact? One penny off petrol. Will that have any effect upon

the future march of this nation? We hear of the rate relief that is to be applied. It will be applied, though in a most unreasonable manner without any rhyme or reason, unrelated in any shape or form to the services being provided by the local authorities.
I make so bold as to say that in the country of which I am a member, Scotland, we shall not get a penny piece from this rate relief because there is no local authority there with a 20 per cent. increase, due to the fact that our rates system is based upon a method different from that applying in England. Any hon. Member who cares to look at it will find there will be no local authority in Scotland with a 20 per cent. increase, but many will have a higher rate burden to bear than the highest in England.
Yet this is the height of our imagination, seeking to be equitable and fair in our rating system. The subject is not worth the time I am devoting to it because, as you know Mr. Speaker, time is not on my side. You want short, crisp speeches, and I have digressed to some extent from what I was to say.
Another thing about which I am greatly worried, which was mentioned by the hon. Member for Wycombe, is food subsidies and other things of that kind. These will have no fundamental effect upon rectifying the basic wrongs that exist in this country at the present time. I read the speech of the right hon. Gentleman the Minister of Agriculture who came back from Brussels telling us what he had done to stimulate the agricultural industry. He said "Keep your beasts a little longer and we will give you a bonus. Keep them longer still and we will give you a higher bonus." What does that mean? It means farmers will be feeding those beasts money, the most valuable commodity there is; for it is costing a fortune to buy food for them. What they get from the other end they will spread on their fields as manure. It will be the most expensive manure ever spread on any field anywhere in the world. That is not the way to approach this problem. That is the height of madness. Anybody who knows anything about farming knows that one gains nothing by continuing to feed animals. There is an old term, a little old-fashioned, which I will use: if ever there was bullshit it is the stuff we are being fed at the moment.
This is the most amazing method of government that I have ever met. It is time that that was said in the quest for truth. If the proposals made yesterday and the agricultural message that came from Brussels are the height of our imagination and the brain power of those who seek to represent our interests, shame upon us and shame upon them.
I know, Mr. Speaker, that you are looking at me with some degree of concern. I have probably overstayed my welcome. I should have liked to have said a great deal more.
I have a passing acquaintanceship with the business community. If some of my hon. Friends had any knowledge of that, they would have looked at the great problem which confronted many businesses, especially small businesses, when the previous Government floated the pound. I am not being critical about the floating of the pound. There may be some justification for it. Nevertheless, that added to the very high cost of raw materials and commodities coming into this country and it put out of focus the calculations of many companies over the last three years. It brought many to bankruptcy and many to the verge of bankruptcy.
If my right hon. and hon. Friends had wanted to do something useful they would have looked at the problems of many honest, sincere and hard-working people who have put their life savings and their activities into building up businesses but then seen them disappear almost like snow on a dyke on a warm day. Over the last three years we have had little or no regard for the many people who have small businesses. Many of them are now in liquidation, and many businessmen are in such a state that they know not to whom to turn.
Businesses have no control over threshold agreements. They come along every month now. If one sets a price for whatever one is contracted to supply, how will one Pay for that? But again, we have the silliest thing that was ever thought up in Parliament—companies paying tax based upon this year's calculations of profits which it is supposed they will earn next year. This will mean that many people will have to go to bankers and beg to get enough money to keep

them going. This method will undermine our basic industries. It is from those small industries that this country obtains a great advantage in many ways. To destroy them is the worst thing that we can possibly do.
We talk about our oil and say that we should exploit it as quickly as possible. But the hon. Member of Wycombe rightly says that there is not an unlimited supply of oil, copper, gold, silver and all the basic materials throughout the world. We should be very careful to conserve them. But what are we doing today? None of us is concerned about the balance of payments deficit that is caused by the importation of oil. We have swept that under the carpet. But if we have no regard for that and do not look at the problem carefully, that alone can undermine the economy of this country.
I appeal to this assembly—to the few of its Members as are present listening—to realise that time is not on our side. The sands of time are running out. We must see the necessity for taking resolute action, irrespective of the immediate consequences. The beef subsidy will help me by about £1,000, but it should not be paid. These are the facts of life. As I have said, it will produce the most expensive manure one could put on the fields. Let us recognise the facts of life and do what is right, and then all other things will fall into their proper places.
What has been wrong with previous Governments is that they have been more concerned to retain their little precious position in this House than with the broad well-being of our nation. The call should go out to all good men and true that now is the time to serve not our party but our country.

6.46 p.m.

Mr. David Knox: We on the Opposition benches have listened with great interest to the hon. Member for West Stirlingshire (Mr. Baxter). I would only express regret that so few of his hon. Friends were present to hear his speech. That is in no way a reflection upon the hon. Gentleman but a reflection upon the lack of interest in the debate on the part of his hon. Friends, or upon their measure of shame at the actions of the Chancellor.
The hon. Gentleman criticised the party slanging match in the House. I agree strongly about that. The electorate is becoming increasingly disillusioned with both major parties because of this tendency we have to criticise what the other party has done, knowing full well that we would have done exactly the same had we been in office in the same circumstances. It is important that we should vigorously debate those things on which we disagree fundamentally, but we ought not to slang each other merely for the sake of it. If we carry on doing this as we have in the past. I suspect that the disillusionment of the electorate with us and with this place will become much deeper and that will place democracy under very severe strains.
I should like to concentrate mainly on the measures announced yesterday in the context of the general economic position of this country. Those measures will be judged mainly on their effect on inflation, though in my view their effect on unemployment, on investment and on growth is also important. I want, therefore, to talk mainly about inflation, though inevitably I must touch on the other subjects.
Most people in Britain recognise the seriousness of our present situation. Inflation is forging ahead at a rate of about 20 per cent. The prospects for the immediate future are very bad if things go on as they are going. A recent OECD report has predicted that Britain will have the highest rate of inflation of the six leading non-Communist countries in the first half of 1975. It is not enough for us to sit back and accept this. Something must be done, and done quickly.
However, before taking any action to deal with our current inflationary problem, it is necessary to understand clearly the nature of that problem. This involves a distinction—I am sorry to have to return to this point—between demand inflation and cost inflation, because they are different and they call for different cures. In post-war Britain, too often has our inflationary problem been wrongly diagnosed. Too often has it been assumed to be a demand-inflationary problem. Indeed, too often has demand inflation been assumed to be the only kind of inflation. Too often have remedies been introduced to cure a demand inflation

which have merely aggravated a cost-inflationary situation.
What is the difference between the two kinds of inflation? Demand inflation is where total effective demand in the economy as a whole exceeds supply potential. Prices rise to bring supply into equation with demand. The remedy for a demand inflation is to reduce demand, and this can be done by imposing credit squeezes, increasing taxation, and so on.
Clearly our present inflation cannot be a demand inflation. There are well over half a million people out of work, and unemployment is rising quite steeply at the present moment. There is plenty of spare capacity in British industry. If the three-day working week proved nothing else it proved conclusively that our capital equipment was capable of producing far more than it had been producing, in particular, capital-intensive industries are operating in many cases below break-even point, and so are threatened with bankruptcy. All this means that today there is no demand pressure encouraging investment, which explains in part at least why there is the fall in investment.
Obviously, then, demand at the moment falls short of supply potential and is very sluggish. I believe the Chancellor recognised this and so introduced his modest measures to reflate demand. I welcome these measures, but I will just sound this warning: there is a time lag between the introduction of reflationary measures and their becoming effective, and the Chancellor is too late to stop unemployment rising this year; he is too late to halt a slump in output; and he is too late to stop the fall investment. These things are going to take place and nothing that happened yesterday will change that.
But to return to the analysis of our present inflationary problem—since this is not a demand inflationary problem it must be a cost inflationary problem, and this is where import costs or labour costs rise and so force prices up. It is fairly obvious that when import prices rise the only thing that can happen is that our internal price level rises. But some people would dispute that labour costs can rise except in demand inflationary situations. I agree that at one time—10 years or more age there was a great deal of truth in


this, but I think that today, with monopolies in the form of trade unions and professional bodies in the labour market willing to use their power, this argument can no longer be sustained. Indeed, at the present moment cost inflation is taking place in circumstances where, as we have seen, there is no demand inflation.
So I come to the gap in the Chancellor of the Exchequer's statement yesterday. He did nothing at all to deal with our current cost-inflationary problem, which is an incomes cost inflation. In the years up to the summer of 1972 cost inflation in Britain was caused by excessive increases in incomes—wages and salaries. In the period from mid-June 1972 to February 1974 cost inflation was caused mainly, though not exclusively, by a massive rise in import prices. An increase of 108 per cent. in commodity prices for a country that has to import almost all its raw materials and half its foodstuffs is bound to have a serious inflationary effect. During this period from June 1972 to February 1974, as the Economist has shown, income cost inflation in Britain was kept well under control by the statutory prices and incomes policy at that time in being. Since February of this year there has been a decline of about 10 per cent. in commodity prices and we hope that this will continue. But the increase in incomes has again started to become a serious cost-inflationary factor.
It is at this point, oddly enough, that the right hon. Member for Ebbw Vale (Mr. Foot) has chosen to lift the statutory incomes control. He is, as he ought to know from previous experience, releasing flood gates, so that the benefit of the fall in commodity prices, which should continue, will be lost completely in the floods of massive and uncontrolled wage and salary increases.
Indeed, it is this complete absence of measures to replace phase 3 that is the great weakness of the statement which the Chancellor made yesterday, for it inflation is to be controlled in this country it is not enough merely to reduce marginally indirect taxes, however welcome such reductions may be. There must also be the limitation of wage and salary increases by an incomes policy—an incomes policy that if possible, should be voluntary, but, if it is not possible, must be statutory.
Today, for better or worse, trade unions and professional bodies in a free market position will use their monopoly power in a way they were not willing to use it 10 years or so ago. Whatever some people may think, it is just not possible to break that monopoly power either by legislation or by economic measures. The last Labour Government found it impossible to introduce industrial relations legislation. The last Conservative Government found it impossible to implement very moderate industrial relations legislation. With such experience it is hardly conceivable that legislation could control that monopoly power of trade unions or professional bodies. So that is clearly out.
On the economic side, recent Governments have found from experience, as my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) said in his excellent article in The Times last Wednesday,
that the effect of an old-fashioned credit squeeze by whatever modern name it is disguised is not to halt cost inflation, but to halt investment, to halt output, to force cash-hungry companies to give way to wage demands and to create unemployment for many, while those who can exercise industrial muscle still forge ahead".
The only means of dealing with income cost inflation is an incomes policy. The sooner the present Government recognises this the better for everyone.
Of course, some people will say that what happened on 28th February was a rejection of a statutory incomes policy. But in fact almost 18 million people voted for the Conservative and Liberal Parties in that election, and so voted for a statutory incomes policy. Only 11·5 million people voted against such a policy. And, after all, if one looks at the last Government's statutory incomes policy, phases 1 and 2 both worked and phase 3, apart from the miners, worked fairly well too. Of course, phases 1, 2 and 3 were not perfect, but they were a great deal better than nothing, and they were a great deal better than the alternative.
They were certainly better than nothing, and it is precisely because this Government offer nothing—no real incomes policy at all—that their economic policy is doomed. And it is precisely because the Chancellor of the Exchequer yesterday offered no incomes policy that this package is doomed as well.

6.58 p.m.

Mr. Dafydd Wigley: I have been successfully induced to take up some of the comments of the hon. Member for Leek (Mr. Knox). I do not agree with everything that he said—not by a long way—but in some of his earlier remarks I think there is a lot of truth which is relevant to our situation today, particularly in respect of the three-day working week and the capacity within industry shown to exist at this time. There is spare capacity which is not being used and the question arises, what is it necessary to do in order to get that capacity working on an ongoing basis? We saw that during the period of the three-day working week—in that period of crisis—people were willing to pull together, whereas in the normal context, unfortunately, that is not the situation. The question which everyone, including the Chancellor of the Exchequer and the rest of the Government, must be asking, is, what is it necessary to do in order to get people to pull together to use the spare capacity that exists in the economy? I think that that is a fundamental question.
It is a question that comes to me with particular relevance because, representing a constituency in Wales, I am only too aware of what can happen when, as the hon. Member for Leek said a moment ago, unemployment grows and spirals. It has been said that when England sneezes Wales gets a cold. Unfortunately, in the past this has been true. Not only would we suffer from any increase in unemployment: we would suffer unduly from inflation for two reasons. First, the level of personal incomes is some 10 per cent. to 15 per cent. below the average for the United Kingdom, which means that inflation hits particularly hard. The number of people on fixed incomes in Wales is higher than elsewhere and they are badly hit by inflation, too. In Wales the level of personal wealth—and to some extent personal wealth is for many people the bulwark against inflation—is only 72 per cent. of the average for these islands. These measures, therefore, are particularly relevant for Wales and for any other part of the United Kingdom which suffers from an insufficiently developed economy.
I have an interest not only in Wales but in manufacturing industry, in which I worked for 10 years before becoming an

MP. I welcome the fact that at last we are getting away from the agrarian concept of having not more than one Budget a year and of having only one touch on the accelerator or the brake. That is a ludicrous situation. In a modern economy it is necessary to have periodic touches on the accelerator and the brake, in order to ensure that policies meet changing circumstances. Within the limits of effective administration and broad stability of policy it is essential to have more than one look at the Budget in any year.
On the need for broad stability, I should like to impress upon the Government and, for that matter, upon the Opposition, the need for some continuity of economic policy, particularly on the question of development area incentives. In 1970 the Conservative Government acted with undue haste in scrapping the regional incentive scheme of the day, and within two years they found that a similar scheme was needed and introduced it, albeit with different terminology. Such a switch back and forth is confusing for industry, and I hope that in future there will be a long-range strategy as well as the short-term tactics which are often needed to meet changing circumstances.
I welcome the increase in REP and I trust that the Government will stand by their commitment to maintain the premium for a substantial period ahead. A long-term commitment is necessary for industry not only over REP but on many other matters. Industry will be looking generally for a four- or five-year payback period for its investment plans and it needs to know, for the duration of that period, whether it can count on certain incentives which may be available for development areas.
I welcome REP as a form of regional devaluation in terms of competitiveness, and I am glad that it is permitted by the EEC. It is, after all, only a compensation for failings in the industrial infrastructure, certainly as it affects Wales. I was interested to hear a Scottish Member saying that in central Scotland the industrial infrastructure is now right. It is not right in Wales. Wales needs better roads to encourage industrial development. It needs better railways, certainly electrification, and it needs industrial growth centres and all the services which


are necessary for modern industry. This means dealing with problems which prevent industry from coming rather than compensating it for the on-cost it incurs when it comes. We therefore need integrated economic planning to overcome the problems.
In the context of seeking such a strategy I press the Government to commit themselves to economic plans for Wales, Scotland and the regions of England. In the early and middle 1960s there was a false dawn, in terms of economic planning. In Wales that dawn was crudely shattered by the publication of "Wales: The Way Ahead" in 1967. That document failed totally to establish the targets it was necessary to set for the Welsh economy, let alone explain how to get the strategy for meeting those targets. It was a non-plan, and it was a damper on the enthusiasm of those who sought progress in terms of economic regional planning. I hope that in their future consideration of economic regional policies the Government will bear in mind the need for such a plan.
It has been estimated that between now and 1976 Wales can absorb as many as 200,000 additional jobs. There is an economic potential which is being wasted in terms of the people who are at present under-utilised. We have the economic potential, and it is a matter of using it. If these jobs can be provided the GDP of Wales could be increased at least to the level of the United Kingdom average. We are now something between 12 per cent. and 15 per cent. lower than the per capita GDP level for the United Kingdom, and if we are to increase personal incomes in Wales we must have economic growth.
May I put a proposition to the Chancellor? Between now and his next Budget, will he give serious consideration to ways of raising the level of personal incomes in Wales? To reach parity with England we need an injection of about £400 million a year into the Welsh economy. Perhaps I may draw the right hon. Gentleman's attention to the words of the Foreign Secretary at the meeting of the Council of Ministers in Luxembourg last month. He said:
A possible principle might be based on the recognition that a member State with below-average GDP per head should be

accorded appropriate treatment in respect of resource transfers under the Community budget.
The same could be valid about the relationship of Wales with the United Kingdom, and resource transfer should take place in order to raise the levels of personal incomes in Wales to the levels pertaining within the United Kingdom.
A start may have been made with REP, but it is only a modest start. We value it probably at about £20 million per year, out of the £400 million we are seeking. This concept should be christened the "GDP equalisation policy." It has the advantage that if the level of economic activity in Wales is increased by the Government's strategy the per capita figure of GDP will automatically increase and the need for an injection of finance into Wales will diminish. This servo-mechanism is built in.
I urge the right hon. Gentleman to consider more imaginative tools of regional development. He might consider a differential corporation tax in favour of profits earned in development areas. This would give a permanent advantage to companies located there, and would not restrict the advantage to the first year, during which they make their investment. There has always been a danger of potential lame ducks coming into the Welsh economy in order to get ready funds. However, in the long term we want those firms which are profitable and which will stay there and grow. This would help to redress the balance.
The right hon. Gentleman could also consider extending the period of payment of corporation tax in development areas. Such incentives might be applied specifically to companies which relocate their head offices in development areas. There is a real danger of securing only factory floor jobs in development areas, with the office jobs and more lucrative posts staying in London. That development could have a serious effect on a local community. I urge that the development agency recently announced for Wales and Scotland in connection with oil development should be established without delay. The Secretary of State for Energy said that it could be established in Scotland without having to wait for a drop of oil to flow. The same could be true in Wales. This agency has sufficient powers


to lead in the battle for securing the economic growth necessary for Wales.
We welcome the Chancellor's announcement of rates relief. In Wales we have suffered phenomenal increases in our rates, particularly our water rates, and I hope that Wales will get some relief in that direction.
There are several other aspects of the economy and the Budget as it affects Wales that are particularly pertinent, and we are looking particularly for a strategy to lead us out of the present situation. Not only in the Welsh and other regional contexts, but overall, one of the important things for the Government to do now is to examine their spending levels and consider whether, in modem circumstances, we can justify spending between £2,500 million and £3,000 million a year on defence, or whether we must use the money available in the best possible way to develop our economy. If that is done wisely we can build on the potential in Wales and elsewhere to secure a worthwhile future. Unless we look very hard at the details of ways of doing that, our people will suffer unduly.

7.10 p.m.

Mr. Jonathan Aitken: I entirely agree with the call of the hon. Member for Caernarvon (Mr. Wigley) for more stability and continuity in our national economic policy. However, when he went on to demand an extra £400 million-worth of public expenditure for Wales I thought he might be falling into the same trap as the Chancellor of the Exchequer fell into, in making something of an electioneering speech. Given the present state of our economic fortunes, we need a little less electioneering and a little more statesmanship. We certainly had statesmanship this afternoon in the very different oratorical styles of my right hon. Friend the Member for Taunton (Mr. du Cann) and the hon. Member for West Stirlingshire (Mr. Baxter).
There is an old saying that the difference between a statesman and a politician is that a statesman is someone who thinks of the next generation, whereas a politician thinks only of the next election. On yesterday's showing there can be no doubt that the Chancellor of the Exchequer firmly puts himself into the category of opportunist politician. The bromides in his speech may well fool

some of the people for some of the time, but his proposals came as a great disappointment to those who appreciate the true gravity of Britain's present economic position and who were hoping for some signs of more serious statesmanship from the right hon. Gentleman.
However, perhaps we should be thankful for small mercies. After all, in the short space of 4½ months Denis the Socialist Menace has transformed himself into Denis the genial chemist, dispensing a selection of placebos and cosmetics as instant cures for the very ailments which his own misguided earlier prescriptions created.
Some of the right hon. Gentleman's measures will be welcomed on both sides of the House—a little painkiller to relieve the anguish of ratepayers, a tranquiliser to quieten the unemployed in the regions, and a small stimulant for beleaguered shareholders. But our national economic sickness is far too deep for such irrelevant electoral mini-cures. If we are to tackle the present economic crisis with the urgency it deserves, the first essential is for the British people to be told the grim facts about the revolution of falling standards and expectations we now face. I entirely agree with my right hon. Friend the Member for Taunton that the people must be told the truth—and the truth is that Britain is on the verge of going broke.
Virtually every national economic indicator is pointing to danger. We have a £4,000 million-a-year trade deficit, which is rising steadily despite the arcane arguments about the difference between oil and non-oil deficits. We have 20 per cent. inflation, and it is rising. Our output and productivity are stagnant. Business confidence is in a state of collapse. A growing number of commentators of all shades of political opinion, headed by the apocalyptic Mr. Peter Jay of The Times, believe, as I do, that we are on the brink of an economic catastrophe which can lead only to a major recession, with unemployment figures perhaps being as high as the low millions for the rest of the decade—a situation that could lead to the suspension of parliamentary democracy itself.
It is clear from the Chancellor's speech that he shares none of this pessimism. To hear him this afternoon, one would


think that everything in the garden was rosy. Let us hope that the right hon. Gentleman is right—but, so far, the optimism of successive Chancellors of all political parties about the robust good health of the British economy has proved to be a triumph of hope over experience. Surely the time has come to lower our Westminster mask of political make-believe about the good prospects for the economy and to proclaim fearlessly that there are no painless ways of winning the battle against inflation.
It has often been said that the British are at their best when their backs are to the wall. It has been the worst failure of contemporary politicians that we have failed to show the people where the wall is. Let the word go out from now on that the battle against inflation in the 1970s will be almost as unpleasant as, and no less crucial to our national survical than, the Battle of Britain in 1940. The weapons to fight and win the battle are available. They are such measures as a continuing reduction in the growth of the money supply, a determination to balance the budget within the next three years, and an end to threshold agreements being abused just as springboards for larger wage increases, and a swing away from the illusion of reflation towards deflationary policies.
The consequences of such measures will certainly be unpleasant. There will be an inevitable decline in everyone's living standards for two or three years. There will be several company bankruptcies, and a sharp rise in unemployment, although a rise in unemployment of that size will be much less severe and unpleasant than the rise that could come if the situation is allowed to go on as at present.
All these effects, brutal though they may be, will be less disastrous than the situation that hyperinflation or continued inflation will produce. At the end of the day, when some element of stabilisation has been achieved, at least there is a hope of renewed prosperity for all our people.
I have said enough to indicate that I am one of the lonely and unpopular Cassandras who believe that Britain is on an economic "Titanic", and sinking fast. There is still time to slam the watertight doors and keep the ship afloat, but we

need an Iron Chancellor at the helm, giving the necessary firm orders for disinflationary policies. Instead, we have been treated to nothing more than an electioneering striptease on the quarterdeck.
Economic realists will know that yesterday's acts of electioneering appeasement, at a time of serious crisis, may cause the present Chancellor to go down in history as the economic Neville Chamberlain of the Labour Party. Even that disgrace will be of no consolation when the waters of hyperinflation go over all our heads, as they certainly will if the present policies continue.

7.17 p.m.

Mr. Frank Hooley: I have no intention of following the hon. Member for Thanet, East (Mr. Aitken) along the path of his apocalyptic metaphors. I want to explore a line of argument that has been unpopular, or at least out of fashion, for some time, and one to which we should devote more attention in the near future.
It is time we concentrated our attention in economic matters on the importance of physical resources and the physical control of resources, rather than being obsessed with the manipulation of money—of interest rates, the flow of money, and so on—which has been so fashionable in the past six or seven years and so disastrous in the management of our economy.
It is not altogether a coincidence that the inflation fever has affected not only this country but many other industrial countries in the past two or three years. One reason was the straightforward physical crisis that hit world agriculture in 1972, when harvests around the world were the worst for many decades. Between 1971–72 and 1972–73 stocks of cereals fell from 49 million tons to 29 million tons, and stocks of rice were almost entirely exhausted in that period.
We had an almost unprecedented situation, in which adverse weather simultaneously affected the harvests in the Soviet Union, China, India, Australia. West Africa and South-East Asia. It was a world-wide blow at agricultural production.
The consequences were that Russia came into the market for cereals on an enormous scale, a world shortage was created, and world cereal prices rocketed


in 1972 and went up again in 1973. There was a chain reaction on food prices generally, as cereal prices obviously affected the price of feeding stuffs for animals. That chain reaction seems to have carried through into commodity prices generally. The trigger mechanism was not a monetary factor; it was not any fault in the International Monetary Fund arrangements; it was not any sudden change in monetary policy by an industrial country; it was the physical chaos in agriculture in 1972 resulting from adverse weather conditions, around the globe, of a quite striking and unprecedented nature. Of course, the effect of that pressure was particularly savage on the British economy, as we have to import half our food and nearly all our raw materials.
The point of quoting this aspect of economic matters is that I want to emphasise the importance of physical resources and the necessity to pay attention to trends in world physical resources in managing our economy. We should not suppose that tinkering with monetary mechanisms will necessarily offset the kind of effects that I have mentioned. Obviously no one pretends that the Chancellor can forecast the weather, or do anything about it. In managing our economy we must pay more attention to trends in agriculture. Those trends in the next few years are not at all good in terms of world production balanced against world population. We must pay attention to those trends and to the production of other raw materials which are so important to our economy.
I noted that the Common Market recently had little inhibition in imposing controls when it suited the French farmers to keep out the supply of beef from Common Market countries. That is not an example which I would praise, but it indicates some realism in terms of the control of supply when it happens to suit a particular pressure group.
There are three important components in our internal physical resources. The first component is plant and machinery, the second is the raw material that we need and the third—the most important—is manpower. In this country plant and machinery for industrial investment takes up, to a striking extent, a much lower proportion of our gross domestic product than it takes no in the economies of our major competitors. According

to the figures kindly supplied to me by the Library, in 1970–71 and 1972–73 consumer demand ran at about 63 per cent. of our gross domestic product. In France the comparable figure was 59 per cent. In Germany it was 54 per cent. and in Japan, 52 per cent. Industrial investment, on the other hand, took up 15 per cent., of our GDP, whereas it took up 23 per cent. in France, 22 per cent. in Germany, and 26 per cent. in Japan. Those two sets of figures go a long way to explaining why our industrial competitors have done so much better in world markets in recent years than this country, and why it is that our balance of payments has contrasted so disastrously with the balance of payments of Germany, France and, until recently, that of Japan.
In terms of the resources devoted to plant and machinery in manufacturing industry, in 1964, when the Labour Government took power, the sum expended was £863 million. By 1970, it had risen to £1,500 million These figures are based on current prices. Expenditure fell in 1971 to £1,495 million. It fell again in 1972, to £1,362 million and rose slightly in 1973, to £1,600 million. Whereas we had a reasonable time with some fluctuations from 1964 to 1970, there was almost entire stagnation from 1970 to 1973. Expenditure on plant and machinery, as a percentage of our gross national product, was 2·9 per cent. in 1964. By 1970 it rose to 3 S per cent., and it fell to 2·6 per cent. by 1973. That is part of the explanation of our depressing performance in international markets compared with that of our major competitors.
It is of the highest priority that we improve our physical resources in terms of the modernisation of plant and machinery and industrial development. If, as seems the case, that is not regarded as in any way a necessary fact of life by private industry, clearly we must press on, as I believe we should, with the construction of national institutions and national bodies such as the National Enterprise Board. We must do so to ensure that capital is available for investment and that it is directed to those parts of the economy where it is most urgent and most necessary.
In the context of the Chancellor's mini-Budget, I am slightly surprised by his use of the regional employment premium,


although I appreciate its value to some parts of the country. I am surprised that it is not being supplemented by the supply of money for advance factories or extra grants for machinery and equipment for those industries which are situated in the less favourable regions. It is a mistake to suppose, because we supply money direct for jobs in the form of the REP, that we are doing better with the REP than by supplying money for the purchase and installation of plant and machinery and the modernisation of industry, which in itself generates jobs and has a considerable spin-off. That is important in giving the British worker the necessary power at his elbow to compete with his colleagues in France, Germany or Japan. I hope that the Chancellor will supplement in October what he had done in July with the REP by making some further effort to stimulate investment in plant and machinery in the regions by additional incentives to industry.
Obviously, we have less control over raw materials than we have over consumption. I have the impression that the commodity price typhoon has blown itself out and that we shall get slightly more comfortable weather, in terms of commodity prices, for a short time ahead unless something goes seriously adrift. But it is clear that oil prices will not go back to what they were in September 1973. They may stabilise at their present level, but they certainly will not fall significantly. Therefore, I am astonished that the Chancellor should have taken action to cut the price of petrol at a time when I would have thought that some discouragement in demand for that commodity was necessary.
It would not be difficult to discourage consumption if road fund taxation was switched to the price of petrol. That would encourage the use of smaller cars and lower consumption. It would not increase the cost of motoring for the ordinary chap with a Mini or a Ford Escort, but it would increase the cost for the man with a 3·5 litre Rover. It would lead to a real saving of petrol consumption and, therefore, to a saving on the balance of payments. I hope that some attempt is made to consider that matter when we come to an October Budget.
I am bound to say that in general terms I find it a rather dubious policy that we

should borrow money to pay for raw materials. It does not seem to me to be fundamentally sound, however useful it may be as a tiding over process. It does not seem fundamental to our needs to be borrowing massive sums to buy a raw material which is essential to the whole economy, because we are then relying on confidence in an emergency to maintain our international position. It may have been forced upon us in the short term, with the violent escalation in oil prices, but in the longer term it would seem to be more sensible to curb the fairly substantial consumption in various ways of a commodity which is so appallingly expensive.
I echo the remarks made by the hon. Member for Horncastle (Mr. Tapsell). It is all very well to differentiate the non-oil deficit and the oil deficit in the balance of payments, but the oil deficit is nevertheless real and somewhere along the line of the borrowing we are going to cover it with as a temporary measure will be a charge on our balance of payments, perhaps one which we will find embarrassing and difficult in the future.
The third physical resource of our country, and by far the most important, is our manpower. The regional employment premium may be useful in maintaining employment, particularly in Scotland and the North, but I suspect that in some ways its main effect will be to help the liquidity of certain companies rather than to create new jobs. It may prevent firms from going out of business, but how far it will create new jobs is more debatable.
The great problem at the moment is the shortage of skilled manpower. The British Steel Corporation is desperately short of men in certain areas, particularly Scunthorpe, and there is a serious shortage of skilled manpower in the engineering industries in Sheffield and also in a sector of enormous importance to the country—offshore engineering and the huge programme for structures that we shall require to produce our indigenous oil. There is now a serious shortage of welders and other skilled workers to create the rigs and other machinery we shall want in order to exploit the North Sea.
I do not think that the Government training places we have are anything like


enough to make up the deficit in skilled manpower now emerging. Government training places in England in January totalled 11,174; in the Yorkshire and Humberside area, there were 1,746—a ratio of one to every 1,700 employees. Of course, training of all kinds goes on within industrial establishments, universities, colleges of advanced technology, polytechnics and so on, so it is not fair simply to quote the figures of Government training places. But I am fairly certain that the effort we are putting into training is nowhere near commensurate with the need, and it is unfortunate that every time we have some expansion of industrial activity we have serious labor shortages in key areas where engineering and other industrial processes are important.
I would have been somewhat happier had my right hon. Friend, instead of doubling the REP, or as a supplement to doubling it, devoted more resources and effort to manpower training so that over a period of time, since it does not have immediate effect, we could overcome the shortage of skilled manpower which arises as soon as the economy starts to move into gear.
I welcome my right hon. Friend's relief to ratepayers, which is sensible and possibly the only interim cure for an impossible situation in local finance, and I welcome the increase in food subsidies, but I look forward to an October Budget which will do far more for industrial investment, for manpower training, possibly something for family allowances, and will see us on the road towards national solvency and industrial efficiency.

7.35 p.m.

Mr. Norman Lamont: I want to follow the hon. Member for Sheffield, Heeley (Mr. Hooley) on two points—first, his scepticism and some anxiety about the amount of foreign borrowing the Government are undertaking and, secondly, the need for greater economy of fuel.
One point which both sides of the House seemed to enjoy yesterday was the Chancellor of the Exchequer's announcement of the borrowing facility from the Lord of the Peacock Throne himself, the Shah. Indeed, the Chancellor seemed to enjoy the announcement, and to enjoy rebuking my right hon. Friend the Mem-

ber for Carlshalton (Mr. Carr) for not talking about the Lord of the Peacock Throne in sufficiently respectful terms. Had the Shah been able to be present yesterday to examine the security against which his loan is being made—the British Government—he would have been somewhat puzzled by the hilarity with which the announcement of the borrowing facility was received in the House of Commons. He might also have been puzzled by the general hilarity and frivolity at a time when this country is facing an acute economic crisis.
I do not think that the Shah would have seen very much evidence from yesterday's goings-on in the Chamber to persuade him to transport from here to Iran some of the parliamentary and democratic institutions we value so highly. Yesterday, we saw democratic politicians at their worst and failing to live up to the situation of crisis confronting their country.
It is dangerous for a politician of one party to accuse those of another of party politics, but surely in times of acute national crisis one is entitled to expect partisanship to be modified to some extent. What we saw yesterday was in reality a blatant piece of electioneering. We saw that minority Governments are not the blessing that some Liberal Members have suggested they might be.
I agree with the Prime Minister on one thing, if on no other—that it would be much boner for this country if we could have a Government with an overall majority, and there is no doubt in my mind that the uncertainty in the economic situation has been made much worse by the uncertainty in our political situation.
Added to that, we have a Prime Minister who appears to display less and less interest in government, and a Chancellor of the Exchequer who seems to be anxious about his own reputation in his party and to put himself in a high place in it so as to fill any vacancy which might occur in its leadership. Add all these elements together and one has an extremely dangerous political situation on top of an extremely dangerous economic situation.
Why was it necessary to have a mini-budget at all? What has happened since March? The Chancellor says that perhaps he underestimated the effect of


the three-day working week. He had thought that the effect on the build-up of stocks would have been much greater because the impact of the short-time work had been much greater. But one thing which I think is certain in economics is that an interruption to production by industrial action should be made up. That is self-evident. It is not surprising that production should have been made up as quickly as it was. If that comes as a surprise to hon. Members on the Government side one at least hopes that the Prime Minister's gramophone needle about the three-day week will at last come unstuck.
Many people are sceptical of the type of fine tuning to which the Chancellor seems addicted and to which he is likely to continue to be addicted. He announced this afternoon that within a few months he could come back and if he had not got it quite right he could have another stab at it. Such an absurdity was carried to an extreme when after inadvertently announcing yesterday that the effect of all the measures he was taking was to create 20,000 jobs at the end of next year, he today corrected the figure to 40,000. Does anybody think it possible to fine tune the economy at short intervals as precisely as the Chancellor proposes? If the situation were confused at the time of the last Budget it is still confused and all the economic indicators are still giving conflicting signs. Against rising unemployment figures unfilled vacancies are almost at an all-time record. The Financial Times industrial survey, which the Chancellor is fond of quoting, indicated yesterday that most firms in this country are more concerned about the difficulties of fulfilling their order books than of obtaining them.
It would have been much better had the Chancellor waited longer to see what the economy looked like in the autumn. Perhaps one reason at the back of his mind—he did not say so very directly yesterday, although he did rather more directly today—was the fear of rising unemployment. But it is precisely because Opposition Members are also concerned about unemployment that we regard it as necessary that top priority be given to controlling inflation. The effects of reflation on employment are likely to be temporary and delayed—employment is

determined by more fundamental factors—while the effects of reflation on inflation are likely to be quicker and more difficult to reverse and are likely, ultimately to do more damage to employment
It is because of repeated attempts at fine tuning in the past and at reflation if there were the slightest upward trend in unemployment figures that we have had accelerating inflation around a trend of rising unemployment. Inflation increases with every inflationary bound; but in period of restraint we are lucky if inflation even levels off. It is because the Opposition are concerned about employment that we feel that the Chancellor would have done better to concentrate simply on the single goal of fighting inflation. If he had wanted to do something about employment it would have been better for him to do something to help business confidence, to do away with price controls and to drop nationalisation proposals.
Today the Chancellor tended to play down the economic impact of his measures. Perhaps he was trying to be realistic, but there can be no doubt that his measures are immensely damaging psychologically. People used to complain when Mr. Macmillan was Prime Minister that he lowered the tone of politics with bonanza Budgets and his "never-had-it-so-good" attitude, but at least in those days there was something to give away.
The way the Chancellor presented his proposals yesterday was objectionable. I can imagine how differently the present Home Secretary—who I believe was one of the most distinguished Chancellors we have had—would have put forward the same measures, had he still been Chancellor. He would have said that the country was facing difficulties, one of which was thresholds being triggered, and that for this reason it was perhaps necessary to have a cut in indirect taxation and to stem the tide of threshold agreements. We would have been under no illusion. He would have left us with a clear impression of the true facts of our economy today. But we have not had that from the Chancellor, nor did we have it from the statement by the Secretary of State for the Environment when he said that the situation had changed and that the Government were now able to make some provision for the relief of hard-pressed ratepayers.
The Chancellor in his analysis of the economic situation hardly went into some of the hard, uncomfortable facts. It was an extraordinary contrast with the speeches he made in Opposition. He has talked about commodity prices and the difficulties arising from oil prices. In his speech he appeared to be doing precisely that of which he used to accuse my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). He appeared to be waiting and gambling on a fall in commodity prices later in the year. He appeared as a sort of inverted Mr. Micawber waiting for something to turn down. If commodity prices do fall, it will not lead to a double six—a six for inflation and a six for the balance of payments. If production grows by only 1 per cent. or 2 per cent. next year and wages—if the criteria of the social contract are observed, which is quite an assumption—grow by 16–20 per cent. a year, can anyone expect even with a fairly dramatic fall in commodity prices a marked slowing down of inflation?
The Prime Minister was speaking in the right direction in at least one respect when he said the other day that we should do well if we managed to maintain our living standards. If the Prime Minister is prepared to go as far as saying that hon. Members opposite can be sure that that was an underestimate.
Our balance of payments outlook will not prove to be as rosy as the Chancellor has suggested. There has been an improvement of our export performance recently. The non-oil deficit has improved, but we did not hear from the Chancellor about the way in which the oil deficit has worsened considerably. At the time of the Budget we were told that the oil deficit this year would be £2,000 million, but on the basis of recent figures it looks like being £3,000 million. That is why I agree with the hon. Member for Sheffield, Heeley (Mr. Hooley) that we must look at ways of saving fuel.
Borrowing will not be an easy way out. We have mortgaged our North Sea oil many times over. We are getting into the position of becoming a secondary bank for the rest of the world. We are involved in a high-risk strategy. If sterling depreciates it may be difficult to meet our interest and repayment obligations. We may think that we can delay

putting our house in order, but we may find suddenly that our credit lines are exhausted and that the rest of the world expects us to bear the same burdens as they are prepared to bear.
The Government's top priority ought to be to control inflation. Everything else should be subordinate to that aim. Every weapon ought to be used in the fight against inflation, in terms of both monetary and incomes policies. There is no wall of China separating these two. But the Government seem to be retreating from almost every anti-inflation device. They are doing away with pay restraint at a time when wage claims are accelerating. They are depending on the social contract—which is not a contract in any realistic sense—and are now adding to the borrowing requirement and moving from the declared objective of having fine control of the money supply.
The Chancellor is like a man on a trapeze. When he does his first somersault we admire his skill. When he does his next somersault without a safety net we draw our breath. Finally, when he does a somersault without either a trapeze or a safety net we are entitled to feel apprehensive.
It is impossible now to exaggerate the seriousness of the threat of inflation. We are on the point of hyper-inflation. We are at the situation where the strains on society have become intolerable, where one group in society will turn against another. We must face the seriousness of that situation. We must face reality before reality faces us. What we need is a policy that takes account of our national interests rather than the National Executive of the Labour Party. We need a strategy rather than short-term gambles and, above all, we need to have the full facts of our economic situation spelt out rather than having a false sense of security created which will be as dangerous as it is deceptive.

7.50 p.m.

Mr. E. Fernyhough: One of the prices which Members have to pay for having been in this place for a few years is that when they listen to a debate of this kind they sometimes say to themselves, "I have been here before." I cannot count the number of times I have taken part in or listened to debates of this kind over the past 20-odd years. I have heard forecasts that the end is nigh,


that there will be no recovery, that there will be oblivion for the entire nation. Somehow we struggle back, only to get into another crisis. What is perfectly true is that no matter how vicious the ills and sicknesses of our society the British nation refuses to die.
I have no doubt that in 12 months' time anyone reading the report of this debate will say, "Isn't it remarkable that right hon. and hon. Members who took part in the debate could have been so pessimistic?" I do not doubt that the position is fairly serious. I am the last man in the world to try to hide uncomfortable facts from my people. In my election addresses I have never promised my people tax reductions. I have told them that I cannot build the kind of Jarrow or the kind of Britain I want on the basis of tax reductions. They are commonsense people and they have accepted my advice. That is why I have been returned with an increased majority at each election. I have spelled out to them what are the issues and said, "These are the choices."
If the Chancellor had been here today listening to all the things that had been said about him in the short time that I have been listening to the debate he would have been amazed. He has been accused of being an opportunist politician, of blatant electioneering and of introducing a mini-Budget. The hon. Member for Kingston-upon-Thames (Mr. Lamont) has been here for, I think, two Parliaments. In that time how many Budgets did the right hon. Member for Altrincham and Sale (Mr. Barber) introduce when he was Chancellor? He was never satisfied with one Budget a year. Sometimes he was not satisfied with two. If anyone has set an example for my right hon. Friend to follow it is the right hon. Member for Altrincham and Sale. He was always introducing mini-Budgets. Always one cancelled out what the other had attempted to do. It is not for the hon. Gentleman to accuse my right hon. Friend of setting some precedent just because he has introduced two Budgets this Session and says that he may introduce a third in the autumn.
If my right hon. Friend had not introduced this Budget, what would right hon. and hon. Gentlemen have been doing dur-

ing the election? There has been nothing more dishonest in British politics than what has happened from March until now with regard to the attitude of Conservative Members towards rates. It was their Acts of Parliament—their policies—which raised rates. As soon as they lost power every one of them tried to transfer the responsibility to this Government. Whether it is the general rate, the water rate or the sewerage rate, Conservative Members know that the increase follows as a result of their legislation. For them to go round the country raising howls as though this Government were responsible for the high level of domestic rates is as politically dishonest as anything I know of.
The same is true when they complain about the inflationary effects of threshold agreements. These agreements come from their legislation. It is true that most of my right hon. and hon. Friends agree with that policy, but it was the Conservative Government who passed that legislation. Conservative Members ought not to complain too bitterly about the effects produced by the legislation. If threshold agreements are inflationary, the responsibility lies with the former Government.
We have had a reference to the monopoly powers of the trade unions and the suggestion that they were bound to cause inflation. Nowhere has inflation been greater than in the price of land. I did not hear a single Conservative Member complaining about the indefensibly high price of land, which has risen more than any other price in the last four years except that of oil.
No hon. Member opposite ever makes any complaint about the extortionate demands of landowners when someone needs to buy a piece of land. The same can be said about property. The inflation on the property market has been astronomical. There have not been many complaints from hon. Members opposite about that. Nor did they do anything about it when they had the power. It is no good saying that the Shell workers are greedy because they demand and ultimately get the sort of wage settlement agreed recently. They can see what the profits of the oil companies have been. The lads at the refineries and elsewhere have made those profits. Unless we are


prepared to condemn profits of such magnitude we cannot say that the men who do the productive work should stand aside and do nothing. If they feel that their work is creating untold wealth for those who own the company and that those profits will not be used for social benefits, in the free-for-all they will, in the words of Frank Cousins, be part of the "free".
It is unfair that all the problems which beset Britain should be placed upon the shoulders of the trade unions. No matter how much Opposition Members may decry the social contract, what my right hon. Friend has done this week has made that contract into a reality. My right hon. Friend is trying to create a climate in which the trade unions will act responsibly and play their part in getting Britain back on its feet. With the help of the trade unions we can accomplish that. Without their help we cannot. So Opposition Members should attack the trade unions a little less and encourage them to act more responsibly than do some of their friends in financial and land circles. If we can get that response from the trade unions it will be beneficial to the nation in general.
I do not want Opposition Members to think that if the unemployment figures reach 1 million or 2 million, as has been suggested in some speeches, the country will remain peaceable. In pre-war years it may have been possible to keep silent men who walked the streets seeking the job that did not exist. If anyone believes that in the 1970s we can go back to the climate of the 1930s, he has another think coming to him. Nothing is more likely to give rise to a rebellion than 1 million or 2 million men, able and willing to work, being denied the right to work. I hope that no one believes, whatever our problems, that the solution can be found in putting men out of work.
Some of our problems arise from the actions of the previous Government. I forecast that if we went into the EEC we should pay a tremendous price, and we are paying a tremendous price. I forecast that the EEC countries would send to us more exports than we should be able to send to them. That, too, has happened. The imbalance in our trade with the EEC is growing monthly, and will continue to grow. That is why I have never believed that our entry into the EEC was a good bargain.
Similarly, I believed that we should not give to an outside authority powers which should lie with the House. The House did not decide that the price of British steel should be increased last November; that was a decision of the European Iron and Steel Community, which told the British Steel Corporation to put up the price of its steel because it was below the Community price and we therefore had an unfair competitive advantage. That is the kind of advantage we need if we are to increase our exports. Similarly, it was not by a decision of the House of Commons that we put levies on imported food. Those decisions, which forced up the price of British food, were made outside the House.
From beginning to end the bargain we struck has been a bad one. If we are faced with such terrible problems, will someone explain to me why the British people should continue to carry a heavier arms burden than any other country in the EEC? What more have we to defend than the other countries of the EEC? Why should we ruin ourselves by spending on defence a far greater percentage of our gross national product than does any other member of the EEC? If cuts have to be made in public expenditure they should be made in defence. Real savings could be made there.
To what purpose should we devote those savings? I should start by restoring the cuts in public expenditure made by the previous Chancellor last December. We cannot get out of our difficulties by cutting the housing programme, the hospital programme or the school building programme. That is not the way to overcome our difficulties. That policy results in many people becoming even more impoverished.
In my constituency and in most northern and Scottish constituencies there is a legacy of old industrialism that will take decades to overcome. That is why I am glad that the Chancellor has doubled the regional employment premium. Unemployment hits first and hardest at development areas—

Mr. Aitken: The right hon. Gentleman is keen on cutting defence spending, but does he not realise that to do that would put a large number of people out of work—not merely soldiers but people who work on defence contracts in factories?

Mr. Fernyhough: We should not put them out of work; we should do precisely what we did between 1945 and 1949, and transfer them to peaceful production. There are many men engaged on armament production who could be found work in the shipyards and on oil rigs. There would be jobs for many trades, including welders, boiler makers, electricians and platers, in the manufacturing export side of British industry. Those men could be using their skill to increase our export potential. They are denied that because they are undertaking work which the hon. Member for Thanet, East (Mr. Aitken) thinks is the only job they can do. They are trained and skilled men. We are short of those men in British industry, and there would be little problem in finding them jobs in which their skill could be better utilised. This would not only save Government expenditure; it would enable those workers to make a greater contribution in increasing our much-needed export trade.
I end as I began. I have trodden this road many times. I have no doubt that, with good luck, I shall be here when the next crisis arises, but until then I still believe that we shall survive and pull through. I believe that the measures announced by my right hon. Friend yesterday will be welcomed by the public and by the electorate when the General Election takes place in the next few weeks.

8.12 p.m.

Mr. Fred Silvester: The right hon. Member for Jarrow (Mr. Fernyhough) said that he has listened to debates on previous disasters which were to come but which never arrived. To some extent I share his view that we have cried "Wolf" on many occasions. However, what arises out of the present economic debate is that we have allowed the debate to go on over the years and, although we have satisfied ourselves that the current crisis had been put right, the underlying situation has been getting progressively worse. That is the situation we are now facing. Even if we get over the present situation, as I am sure we shall sooner or later, we must tackle some of the underlying problems. They will not go away. Guesses vary as to how long it will be before we come to a real "crunch" situation,

but not many will give us much over 10 years before this happens.
I have listened to many economic discussions both in the House and outside it. When listening to experts who draw their examples from other countries with their varying political systems, the impression I have gained over the years is that many of these matters are not as translatable to this country as some people assume. Experts quote examples on money supply in South-East Asia, others talk about public expenditure in Sweden, yet others talk of indexation from Brazil. We also hear much comment about the position of the United Kingdom in the league table of growth set by various European countries. The hon. Member for Sheffield, Heeley (Mr. Hooley) mentioned investment in Japan, Germany and France. However, these examples are not immediately translatable to the United Kingdom and one assumes that there are psychological factors involved in these various countries. It is no good our assuming that we can apply a specific policy without seeing how it will affect the different mentality of people in the United Kingdom.
There are three mainstreams in our political discussions which are of great importance. One was exemplified by the right hon. Member for Jarrow—namely, our memories of the past. Representing the constituency of Jarrow, the right hon. Gentleman has good reason to think about the importance of unemployment at the back of our minds. I would not attempt to diminish the importance of that factor, but it is clear that the circumstances which led to the evolution of the policy which we have all been pursuing since the war have substantially changed. Even the nature of unemployment has changed. It is possible for us to consider ways which—if it became necessary for us to adopt a policy leading to higher unemployment, as it may—would make it more acceptable. It is possible to imagine a situation in which we were prepared to consider wholly different levels of unemployment benefits if unemployment reached beyond a certain level. That is a feasible policy which could be varied from region to region.
I do not know whether we have reached that situation, but we carry on our debates


as though that situation will never arise. Whether we approach the question by deliberate actions by deflating the economy, or whether we continue our inflation year after year until companies go bankrupt, we shall face a situation in which levels of unemployment are a real element in our economy and we should devote time and thought to what that concept means.
There is another underlying feature of the situation to be considered—namely, that not all unemployment is the same. The hon. Member for Sheffield, Heeley mentioned lost opportunities in the use of scarce skills. This affects the situation where each time the economy is able to grow we are brought to a stop because we fall short in certain skills. This is another matter to which we should give careful attention.
A further feature of the situation is the assumption that the electorate is impatient, that it is not prepared ever to wait. But I do not believe that it is necessary for the cynics always to be right. When we are discussing education, the National Health Service or whatever it may be, hon. Members make grand proposals, all of which must lead to expenditure. We are dab hands at this process when we are anxious that new duties should be laid on local authorities. We pass the matter over to local authorities and say, "Get on with it". We are then surprised when we discover that it requires additional manpower or increased rates. We can look at the question the other way and consider that not merely public expenditure but private expenditure is the right way to spend that money.
I have examined some recent research into the way in which young people think on these matters. It is often argued that the younger generation is happy to accept higher public expenditure because young people have a strong social conscience and that there are many things which they wish to put right. I am sure that is true, but it is also true that they enjoy, as we do, a desire to build up their family situation. It may mean a new outlook on the family, but there is a desire to make a personal expression in terms of housing and the wider enjoyment of many things that their fathers did not have—a desire which involves private expenditure.
One element in the psychology which we must consider at some stage is the extent to which we can continue to pile on public expenditure and take away the right of people to express themselves in the expenditure of their own money. We must first consider how to put the lid on the proportion of national income that we are prepared to spend on public expenditure. Secondly, we must examine the amount of taxation we take from people before it becomes a serious disincentive. An article in The Economist recently made the point that we have now reached the stage in the present rate of inflation where the same people who draw social security benefits nevertheless simultaneously pay tax. We are reaching a situation in which more and more people are being put into the tax bracket, with serious consequences.
I think that we can persuade people to postpone their desires provided that we take a clear decision. We should be prepared to put limits on public expenditure both by Government and by local authorities.
The third point in our psychology is one for which both parties have been responsible. We have been willing to speak rousing stuff about pulling in our belts, straightening up our backs and facing the current crisis. The words sound tough, but frequently we shy away from the action consequences which should flow. We are still up against this. I am sure most hon. Members will have read Peter Jay's article in The Times. I do not agree with it all, but it contains one statement which is very true. It is that we have shown a deteriorating trend because of the desire to postpone decisions, and we are now reaching a situation, where we are again willing to postpone decisions. This time we are looking now at the Holy Grail of North Sea oil which we believe will bail us out. This evasion continues even in the situation of the mini-Budget.
I am not seeking to make life unnecessarily unpleasant. I am not one of those who believe in the self-flagellation school of economics. But although there is a danger of world deflation and a slump which could arise if we started panicking as a result of the balance of payments situation arising from oil, nevertheless we are in a hopeless position if we try to keep the world's business going on our


own. We are the last country to undertake reflationary action when our serious competitors have found it necessary to keep their own economies dampened down. We shall be in grave danger if we try to go it alone and suddenly find ourselves out on a limb and regretting it.
I recognise that in these circumstances almost anything that one can say is of infinitesimal value because the problems are so great. But the most important message which could go out from this House as a result of today's debate is to ask people to try to give up the third of our tendencies, which is our infinite capacity for self-deception. If I may give one example of what I mean, we have in the mini-Budget nothing which will eradicate the likelihood of a rise in unemployment. We have the REP, which will assist, but it will not eradicate what seems likely to happen in the coming year. Yet we shall make great play with it.
Meanwhile, we are continuing with a price code which contains in it much great dangers of unemployment where companies are being squeezed very seriously and are in great difficulty. We have not yet had any proposed amendments to the price code. We are asked to say that this Budget and the subsidies of the Secretary of State for Prices and Consumer Protection will do this or that to the odd 1 per cent. or 2 per cent. of the RPI, but to the housewife they are a drop in the ocean. If we simultaneously running price codes which entail real risks for the future, we are in danger of applying a short-term cosmetic to a long-term difficulty.
If any message leaves this debate, I hope it is that people will try to speak more clearly. I hope that, as a result of these two days, we can forget the possibility of an election in October and consider what we shall do after the election, bearing in mind the decisions that we are likely to have to take. Nothing that I have heard from the Chancellor of the Exchequer leads me to believe that we are likely to get much of that.

8.24 p.m.

Mr. Gordon Wilson: I have no hesitation in declaring this Budget to have been a lost opportunity. It is clear to those of us who live in areas which have not been blessed with high employment and prosperity in years

gone by that there are dangerous trends developing. There is an incipient recession. Already in our constituencies we begin to notice that firms are laying off workers, or considering doing so. There are certain industries in which this is becoming apparent.
One of the first indicators, usually, is the building industry. On Friday, I discovered from a firm in my constituency that it faced a slump in the modernisation of houses as a result of the December cuts in public expenditure which it thought would be followed by a change of policy by the present Government. Although those cuts were of a three-monthly duration and were supposed to be reconsidered after the election, and although this Government have had time for the reconsideration, unfortunately nothing much seems to have been done. As a result, the firm of which I speak has been forced to cut its work force. It is a small joinery firm. At its peak it employed 160 workers. Now it is down to 102. Within a month or two it is feared that it may be down to 20 as a result of the cut in the market.
After hearing that news, I made inquiries from a quantity surveyor in my constituency, who told me that the situation was endemic on the east coast of Scotland. Then I made inquiries of a large electrical contracting firm in Glasgow, only to find the same situation. Unfortunately, there are suggestions that when people come back from their holidays at the end of the trade weeks they will receive dismissal notices.
In the textile trade, employment is slowing down. In the holiday trade and tourist industry generally, again we find the threat of recession. Again it appears that they may have to cut employment. Therefore, when the Chancellor of the Exchequer speaks of the need to take some steps, he sadly under-estimates the effects of the coming recession. I hope that it never reaches us. I trust that what the right hon. Gentleman has done will prevent it, but I doubt it very much.
As the right hon. Member for Jarrow (Mr. Fernyhough) said, it is the areas which in recent years have been economically weakened which are the first to suffer whenever a recession begins to hit home. Again and again this has happened in Scotland, and we have found people put out of work.
There is growing anger about the way in which we in Scotland feel that we are left at the end of the queue. I know that this is not a problem which relates solely to Scotland. Other parts of the United Kingdom are suffering as well. I looked at the July unemployment figures. They showed a dramatic increase in my area. Scotland has 4·2 per cent. unemployment. That compares with 1·4 per cent. in the south of England, 1·8 per cent. in East Anglia and 2·1 per cent. in the West Midlands. These are the better figures. Northern England has its problems. It has an unemployment level of 4·6 per cent. I am sure that if and when a recession comes, the north of England, Wales and Scotland will be the first areas to feel the pinch.
It is not as though there is any slack in the economy to take up in our areas. One of my colleagues put a Question to the Prime Minister today referring to the situation in Norway. The Norway News Digest of 26th June revealed that
In May the number of unemployed persons in Norway fell by 3,400 to 6,400. An Employment Directorate spokesman says that the labour market is now tighter than ever before. The number of unemployed represents 0·4 per cent. of the work force.
Yet the July figure for Scotland was 4·2 per cent. So there is very little slack to take up. Once a recession takes place it will hit us very severely.

Mr. T. G. D. Galbraith: May I direct the hon. Gentleman's attention, if he has not read it, to the leading article in the Glasgow Herald, which points out that, despite the figures that he has mentioned, at the same time employers are finding shortages of the kind of labour that they require? Will he deal with that aspect?

Mr. Wilson: I am aware of that point. I am glad that the hon. Gentleman has brought it forth. We cannot take too simplistic a picture.
There are dangerous underlying trends in the economy, which can be looked at in two ways. The first is the general economic position whereby the Scottish, the Welsh and the Northern English economies have, generally speaking, been less active than those in other parts of the United Kingdom. The second is the failure of successive Governments to become actively involved with retraining.

With a shortage of skills and a large flow of unemployed it takes time to retrain people and to bring forward the numbers available for redeployment and re-employment. Therefore, we must look at the position from these two viewpoints.
I wish to concentrate on the general economic situation. Looking at the current situation in Scotland, there are fears about what might happen in the autumn. I hope that the Chancellor's efforts will meet with some success, but I doubt it.
I was disturbed by the tittering which greeted the offer of the loan by the Iranian Government. When there is talk of the recycling of general finance from the Arab countries into the Western European countries, that kind of reception for credit of 1,200 million dollars may be ill-received by those who are making the credit available. When news comes of money being made available from sources which may seem unusual, I think that hon. Members and others outside this House should be grateful that somebody has had the confidence to make the loan.
I should like to turn to what I hope the Chancellor may do, perhaps not now but in his autumn Budget, if this Government are then operating—because we do not know when the General Election will be called.
The first mistake in macro-economic planning within the United Kingdom is the assumption that there is a single United Kingdom economy. In fact, there are several economies, some of which operate to a degree of over-utilisation and can overheat and others which are under-utilised and where there is underemployment and under-production.
I hope that the Government's economic policy can. on the one hand, be directed to restrain development in areas which are overheated and yet, on the other, have a flexible approach and go towards encouraging areas which require development.
If I may make one plea to the Government, it is that, although they are committed to certain proposals in the mini-Budget, they will still consider relaxing borrowing consent for capital development by local authorities and others in areas like Scotland—for example, in the modernisation of old


houses and improvements in the infrastructure—and ensure that some Government incentive is given to the Scottish economy.
I believe that the Government should consider releasing bank deposits—money held by the Bank of England from Scottish banks to prevent over-lending—so that this money may in turn be recycled into the Scottish economy. I do not see why that should not happen within Scotland, because we have our separate banking system. The Government, through the Treasury, will be able to impose the necessary controls and make sure, by devious sleights, that the money released in Scotland does not find its way back into the money centre in Scotland.
Another idea suggested earlier was that there should be a differential corporation tax. Again, that would seem to involve the benefit of flexibility. If the situation improved in a given area the differentials could be changed.
I am disappointed that the Government have not announced what money they propose to put into the kitty, so to speak, of the Scottish Development Agency. I could make partisan points about the amount of oil revenues that will be taken away from Scotland prior to Scotland's getting self-government, but I shall not do so now. Will the Minister tell us how much he proposes to put into the Scottish Development Agency? That might be of some assistance to industry in Scotland and might give a degree of confidence that would prevent Scotland's going into a recession this autumn or later.
The overall problems of the United Kingdom are very grave, Any hon. Member who minimises them is doing himself and others in the United Kingdom a grave disservice. Only yesterday, I received from a Minister a league table comprising 16 OECD countries in terms of income per head in pounds sterling at current exchange rates. The information goes only as far as 1971, so it is not complete, but it shows that in 1955, for instance, the United Kingdom was number six on the list, surpassed only by the United States, Canada, Sweden, Finland and Belgium.
In 1960, there was a relative improvement, with the United Kingdom up to number four, surpassed only by the USA, Sweden and Canada, but in 1965, the United Kingdom was down to number seven; in 1970 it was down to number eleven, and it was still in eleventh place in 1971. I do not know what has happened in the last three years, but there is no indication from the management of the economy or from the present crisis that the British competiitve position has improved.
Therefore, whatever happens, the Government—be it this one or their successor—have to do some tough rethinking about the structure of the British economy. This is something that we can only commend to the House. In view of the poor rate of progress over the last few years and the minimal effect which the mini-Budget will have on the Scottish economy, I am more and more convinced that only by self-government will Scotland ever be able to develop an economic policy which will give conditions of expansion over a period.
Over the last 20 years, we have suffered from stop-go policies with Britain's overall economic activity being determined by the Midlands and the southeast of England. When one looks at a country like Norway, which is akin to Scotland in size and many other ways, and sees the progress that it has made, with unemployment standing at 0·4 per cent, when ours is 4 per cent., one wonders how long Scotland can afford to wait for self-government.

8.38 p.m.

Mr. John Horam: I agree with much of what the hon. Member for Dundee, East (Mr. Wilson) said about the problems of regional development. I am glad that he gave a sympathetic glance towards the Northern region, part of which I represent. However, when Gateshead United recently applied to join the Scottish League, it was firmly rebuffed, which I took greatly amiss. I do not, of course, agree with the hon. Gentleman about self-government. It would be one of the tragedies of our time if the United Kingdom were to split up, whether it was a split away of Northern Ireland or of Scotland, Wales or the North of England. We should be all the worse for that.
The central point of this debate was rightly emphasisted by the Shadow Chancellor, the right hon. Member for Carshalton (Mr. Carr), in a speech which I followed with great interest. That is, should we or should we not have had a stimulus of the economy at this time? Those who have argued against it have done so on two grounds. The short-term, low key view is that such a stimulus will only add to inflation, either directly or indirectly through the sterling exchange rate.
Then there is a more apocalyptic view which some hon. Members, including the hon. Member for Oswestry (Mr. Biffen), take, that all this fine tuning and demand management by successive Governments is irrelevant, that the problems are much greater and that we must ultimately accept a more Draconian solution. This is where the monetarists come into their own.
On the short-term question, those who argue against what the Chancellor has done have to acknowledge, first, that a 'cut in VAT—one of my right hon. Friend's principal measures—will immediately reduce prices to some extent. Some of it may go in profits, but some will certainly be passed on in reduced prices. That is directly anti-inflationary. Second, some thresholds—we do not know how many: possibly only one, possibly two—will not be triggered and that, too is directly anti-inflationary. Thirdly, there might well be some effect on the wage negotiation process this autumn as a result of my right hon. Friend's measures. Those are two certain effects, and one possible effect, which are anti-inflationary. Against this it is argued that economic activity will rise and that that must offset the direct anti-inflationary measures.
I believe it would be hard to prove that economic activity as such will rise to such a level as to overcome the direct anti-inflationary consequences of my right hon Friend's mini-Budget. It is more likely not to be true when we have to acknowledge, as we must. that we have at present a situation in which some of out resources are under-used. The hon. Member for Kingston-upon-Thames (Mr. Lamont), amongst others, mentioned The Financial Times industrial survey which came out on the day of the package. It was pointed out that some companies are

having difficulty in fulfilling orders and are short of labour. That is true, but it will be seen that those companies are all at the capital equipment end of the industry, which is naturally under strain at the moment following the reflation of the right hon. Member for Altrincham and Sale (Mr. Barber) and the three-day week. At the consumer end of industry there is a shortage of orders and slack in the economy, which shows that we are at a classic stage where we need a fillip to demand, whereby unused resources can be adequately employed without inflationary effects.
My right hon. Friend has also directed measures towards the regions by improving the regional allowance which has been mentioned often, possibly ad nauseam, from this side of the House during the debate. We feel that these are the right kind of measures which will take up resources which certainly are under-utilised at the moment. On both these counts it is hard to argue that one will add a serious measure of demand inflation on top of any cost inflation resulting from wage increases. That is a hard case to argue, and I have not heard a convincing case from the Opposition on it.
With regard to the effect on sterling and the possible consequences for the terms of trade, any package at this time will have some repercussions on sterling. We cannot now know what those will be. We are all gazing at a crystal ball. But the Chancellor did what he could in presentational terms, in his emphasis on the anti-inflationary nature of the measures and also in the shape of the loan from Iran, to put the emphasis in such a way as to mnimise any likely effect on sterling. I believe that, by and large, he will achieve that minimising effect. He has also probably limited the total package in some respects to take account of the likely effect on sterling—and that is an aspect of the measures which concerns me.
With hindsight, his March Budget was too deflationary. But we cannot exactly put back in July what we did not put in last March. Time has elapsed. It was clear even before March that the emerging problem was that of recession. The traditional problem of the balance of payments and even the problem of inflation seemed then to be already improving in


some respect. The recent figures we have had—those from OECD only today—bear this out. It is forecast that there will be a significant improvement in the balance of payments next year. Even for price inflation, the figures show, thankfully, a significant improvement, down to a rate of 12 per cent., which is not very low but is considerably lower than we are experiencing at present. Only in respect of employment do they show a significant worsening.
That was before my right hon. Friend's measures of yesterday, and it is before any further measures he may take in the autumn. That forecast is, therefore, to an extent already dated. But it shows that the emerging problem was one of recession.
In all these things we are in the danger, in economics, of fighting the battles of yesterday or today but not the battles of the future. Given the time lag of economic cause and effect, one has to anticipate as best one can the likely problems of the future and to concentrate on those. The problems which loom so large today are largely problems which one can do very little about because it is already too late.
In a way, this underlines the mistaken approach which so many hon. Members of the Opposition seem to be adopting, from what I have heard today. The constant theme throughout their speeches is that inflation is so important and terrible that we must subjugate every other aim of economic policy to doing something about it. Yet we already see from the economic indicators that while that problem is scarcely receding, other problems are emerging more fully into view, such as the problem of world recession. Therefore, to some extent they are tackling the problems of yesterday.
This sort of mistake, which we have made so often, of concentrating on what seems worst today, when it is the emerging unseen problems which we should be looking at, is one reason why the previous Government were so erratic in then management of the economy and why they were so unbalanced in their approach to the economy and so unsteady in their conduct of affairs. That was the pre-eminent feeling which came from their management, with too many U-turns and too hazy an idea of what the

money supply was like. All these things added up to an extraordinary exaggeration of the economic cycles. That is something which we must try to avoid. My right hon. Friend the Chancellor has conducted his affairs so far with some more attention to steadiness. Steadiness is good in itself and good for the economic community as a whole.
Finally, I come to the question of the more deep-rooted problem, about which we have heard a great deal from the Opposition benches. What the monetarists seem to be saying is that inflation is so bad that we must concentrate on it at all costs. In their view the only way to do this is successively to reduce the money supply until it rises at no greater rate than the national increase in productivity, subject to a certain limited and restricted amount for inflation. In their view, this will then lead to employers either being unable to pay wage increases—or paying them and going bankrupt—or laying off workers and, therefore, the stark choice between wage inflation and unemployment will be firmly and clearly presented to the nation.
This seems to be, as they put it, not merely an economic point but a point about democracy and the rule of law. They are saying, "We observe the trade unions and their modern power and we must set against this the only remaining weapon of the Government, which is the money supply, and we shall watch the two combat each other and the nation will see the consequences." That seems to me to be an untenable policy for any Government. One cannot simply say, "We shall watch people pull down the house and when they have pulled it down we shall say 'We told you so'." It almost has overtones of the debate about whether to withdraw the troops from Northern Ireland. This is ultimately an irresponsible and untenable position for a Government. If a Government tried to go ahead with that sort of policy, the natives would revolt. I think we should find that the people became too disenchanted before we had any chance to have any of the sort of effects which were hoped for.
I think also, if one is saying that Britain has deep-seated problems—and it would be difficult to deny that on the economic record—one must accept that these do not relate simply to inflation.


They relate to the whole complex of economic and political problems. Lack of growth has been the most outstanding characteristic of the British economy since the war. We have grown more slowly than most other nations in Europe. Only two or three years ago we talked about a growth plan, but now it is solely inflation and combating inflation, and every other economic question is subordinated to that.
Also, there is the question of Britain's place in the world. We have not got it clear—and this is partly the result of the debate on the Common Market—whether we are a European nation or not, whether we are an Atlantic nation or not. I think that what we have got to face is that, however it has come about, part of the problem is that we in Britain have not got an agreed philosophy. What a businessman might believe is right for the country would not be acceptable to a militant shop steward. Equally, what a militant shop steward believed was right he could never convince a business man made sense. It is certainly true to some extent of other countries, but it is less true of West Germany, for example, and it is less true perhaps of America. The divide has become so wide in Britain that we have almost reinforced the traditional "two nations".
I think the temptation for hon. Gentlemen opposite, therefore, is to say, let us unite the moderates and isolate the Left Wing, the militants, and exercise them in some way. Then we can get back to some sort of West German type pattern of economic growth. Certainly that is one way of running an economy and a country and it can be said that it has been successful in other countries. I would not agree because I believe there is an unacceptable degree of inequality about it, as well as other problems. But maybe those countries have some things which are better than the things we have, and one must accept that it is a way of governing a country.
But I would pose the question whether in fact we have gone too far in this country; whether the Left, the militants—whatever you like to call them—those who do not believe in a moderate mixed economy have not got too great a hold on power, so that the moderates cannot be united, because there would be too much opposition to their point of view.

I wonder, therefore, whether we have to come to a far more creative, purposive approach than the rather negative clash of these two thoughts and ideologies. I think we have to come to a point at which some party or individual or group has to make a massive leap forward, akin perhaps to the leap into the dark which Disraeli made when he enfranchised a whole new sector of the electorate without any knowledge of the way they would vote, or which was made when the Corn Laws were repealed, to take an earlier example. We may have to try this. I may be wrong. We may be able to muddle through, may be able to avoid this apocalyptic future which the doomsters have pointed to in this Chamber this afternoon and which has been repeated in the Press outside. I hope we can avoid these desperate choices. But the more we go on the more I doubt whether some really fundamental change of this kind can ultimately be avoided.

8.54 p.m.

Mr. Nick Budgen: In my fill-in rôle I cannot say very much, but I take great pleasure in taking part in a debate in which the right hon. Member for Jarrow (Mr. Fernyhough) has spoken, for I believe that he exemplifies the primary consideration which has ruled the British economy since 1944. In representing Jarrow he represents the commitment to full, and sometimes over-full employment. I dare say that the younger Members of this House, of which I believe the last speaker and I are fair examples, can show ourselves to have very conflicting views about the important considerations which should control the economy.
At present there is no agreed philosophy, and it is wrong to go on in this situation. Notwithstanding the easy, optimistic way in which the right hon. Member for Jarrow spoke, there is doom ahead. It is wrong to suggest that the situation is not serious. There is a 20 per cent. rate of inflation, and if that continues over the next four years the value of money will be halved. If we take into account the social and economic effects of inflation we must conclude that our whole way of life—the whole cohesion of our society—is under attack. It is wrong to pretend that there is the prospect of some trade-off, some choice between inflation and unemployment. As


we approach the Weimar rates of hyperinflation we do not have the choice of some inflation; we have the reality that this hyper-inflation will itself cause massive unemployment.
I am concerned not merely with bare economic matters. In the last four months we have seen the erosion of the British character. A society which was compassionate, kindly, considerate and decent has become angrier and angrier, and more and more ill-tempered. Our society, which obeyed the law and understood the concept of the rule of law, has become more and more fretful. That tendency has shown itself over the rates issue. Decent, ordinary, kindly people who, above all else, wished to obey the law and understood the concept of the rule of the law, have said that because of the rate of inflation they will not pay, that they will disobey the law. That is the beginning of the severe social distress which occurs with a 20 per cent. rate of inflation.
There is also lingering envy and malice in our society. We see it when Labour Members, in a muddled and wholly wrong way, blame property speculators for inflation. We see it when Conservative Members, in a muddled way, blame trade unionists for the inflation. We see on every side that inflation is smashing all that everyone of us believes to be dear in our society.
The message we must therefore send out tonight is a simple one. There has to be, in the future, an attempt to secure an agreed philosophy, and over the next two or three years that philosophy must be to contain inflation. We all know that this is not a technical economic problem, but a problem of political will. It could be done if we accepted that it must be done. It is not good enough to say that the economists are supplying us with a variety of suggestions. That is because economists start from a variety of assumptions. If we said to the economists, "Control inflation; all other objectives of the management of the economy are to be subordinated to that one vital aim," they could do it. The reason for the conflicting advice is that they start from differing assumptions.
The message we must send out tonight is that for once the doom men are right, and the nation must concentrate its mind

upon the continuing 20 per cent. inflation. If it does not, it is not just the British economy that is at risk; it is the whole British character.

9 p.m.

Mr. Terence Higgins: The debate has been conducted in a variety of contrasting styles. We had a distinguished speech by my right hon. Friend the Member for Taunton (Mr. du Cann). We had what I imagined may be the swan song of the hon. Member for West Stir] ingshire (Mr. Baxter), whose attack on his own Front Bench can only be described as earthy. I shall await with interest seeing, when HANSARD is eventually printed, whether the expression "expletive deleted" has entered the British political vocabulary. I have rarely heard an attack on a Member's own Front Bench made with such feeling. The House listened to the hon. Gentleman with great interest.
We also heard a calm and closely argued speech by my hon. Friend the Member for Manchester, Withington (Mr. Silvester), and a similar speech by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen). Almost without exception, speaker after speaker has expressed deep concern at the inflationary trend, and many have expressed concern at its implications for employment.
In June, the latest month for which figures are available, the retail price index was 16½ per cent. higher than it was a year earlier. Inflation over the first three months of Labour Government has been at an annual rate of over 20 per cent.—the highest rate of increase ever experienced in this country.
It is against this terrifying background that we must judge the Chancellor's statement yesterday, and his March Budget. We must consider the two together. For example, it was absurd for the Chancellor to say on television last night that he had cut value added tax, and that his proposals yesterday were expected to reduce the yield on value added tax in 1974–75 by about £140 million, whereas his Budget raised the expected yield in 1974–75 by £205 million. The fact is that, taking the Budget and yesterday's statement together, we find that the yield on VAT is expected to be higher in the current year than it would


have been if we had had neither the Budget nor the Chancellor's so-called mini-Budget yesterday.
As a result of what we are having from the Chancellor, we seem to be going up, not down, a roller coaster. The effect of successive fiscal measures is that prices are sometimes going up rather faster and sometimes rather slower, but they are always going up. This is an extraordinary situation in which to find a reversal of policy in the very short period between the Budget and the mini-Budget. After all, we finished considering the Finance Bill at only about 2.30 this morning.
I should like to give just one other example. We are told that the effect of yesterday's mini-Budget will be to reduce the price of petrol by 1p a gallon, whereas the Budget put up the price by 5p a gallon. In his speech we had remarkably little explanation from the Chancellor why it should be right to put the price up by 5p in March and put it down again by 1p in July.
We rather concentrate on the non-oil deficit trend. The Paymaster-General might like to explain why there is this up and down effect in oil and petrol prices. We should be concerned about the trend in the oil deficit as well as the non-oil deficit. What is happening to the trend of oil consumption in this country?
My first point concerns the extraordinarily erratic way in which the Chancellor has been conducting the country's economic affairs since he came to office.
My second point is by way of quotation from the Chancellor's speech yesterday, in which he said:
The first and main objective of the pro. posals I shall now describe is to attack inflation at its source.
He went on to make reference to the TUC guidelines, to which I shall refer later. It is important to consider the social contract and the TUC guidelines against the underlying economic situation, which the Chancellor described in his Budget Statement and which is reflected in the Red Book and the estimates made by the National Institute of Economic and Social Research of what is likely to happen, this year, to real incomes.
Of course, as the Chancellor will know, the indications that he has given are that there is little scope for any increase in

real earnings. It is against that background that we must consider the TUC's proposals and the side of the social compact which is concerned with the overall national interest. It is necessary to ask exactly what rate of increase in money incomes the Chancellor feels is justified. At the moment we have what amounts to an incomes policy, but we have no quantification of either what the norm or the limit should be for wage increases. We have no yardstick by which to judge the performance of the so-called social contract.
The Chancellor has said that the feeling is that money incomes should go up only in line with the cost of living, although in a revealing passage this afternoon he said that it would be much better if there were a 12-month lag between an increase in the cost of living and an increase in wages rather than a situation in which there are monthly increases. That was an interesting and revealing statement.

Mr. Healey: The hon. Gentleman should be aware that the 12-month lag is one of the principles in the advice given by the General Council of the TUC to its member unions.

Mr. Higgins: I understand that. The right hon. Gentleman's comments on threshold agreements are interesting, but we have not had a clear statement from him. We did not get such a statement in answer to an intervention this afternoon as to whether he believes threshold agreements are a good thing and whether he is in favour of them or whether he believes that they are not a good thing and that he is against them.
The reality of the situation is that in present circumstances we are getting many wage claims and settlements far in excess of the increase in the cost of living. We hear of settlements of 22 per cent., 27 per cent. and higher. This is a matter of grave concern because, as the right hon. Gentleman has pointed out, the effect of such wage increases must be to increase prices later.
Against the background which I brought out earlier, if certain powerful groups get increases far in excess of the increase in the cost of living, in terms of real incomes, that can only mean that other groups must suffer a cut in their standards of living. Previously, with the


rapid rate of economic growth, such increases have meant that other people's incomes have not risen quite as fast as have those in powerful groups. In present circumstances the result will be a cut.
It is true that over the years there has been a constant battle for labour to seek to increase its share of the gross national product. At present the scope for redistribution is very low. Despite the right hon. Gentleman's pre-Budget statements, it is clear that the scope for soaking the rich, as he so elegantly put it, and redistributing any significant amount to the population in general, is very slight. We saw that clearly in his previous Budget, in which the impact of the taxes which he imposed fell on a wide range of incomes.
Of course the people who suffer most in such circumstances are those on fixed incomes, and they are the least protected. That is why the Opposition were right, on the Finance Bill, to carry our amendment restoring the investment income surcharge limit to the £2,000 which my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) had originally suggested.
The other point which needs to be taken into account in considering redistribution is the effect that inflation and the Chancellor's tax system is imposing on middle management. Some weeks ago, the Economist had a remarkable article showing how someone now earning £10,000 a year would, at the present rate of inflation and at the present tax rates, need to be earning £40,000 by 1978 in order to maintain his real standard of living. Of course he would not get it. It is not just people already at £10,000 but a number of people coming up into higher money income brackets who find that the effects of progressive taxation hit harder and harder. We are in real danger of creating a crisis in management.
There is another factor which reflects the general trend of wage claims. My right hon. Friend the Member for Taunton (Mr. du Cann) stressed that the British worker, in comparison with workers overseas, is under-capitalised. If we get an increase in money wages of the kind I have described, this will inevitably hit savings and investment in

plant and machinery and the future rate of economic growth. There is grave cause for concern about the overall position with regard to wage inflation.
It is worth quantifying the effects of the Chancellor's new proposals. Yesterday, he said:
The measures I have announced today will eliminate all but 0.14 per cent."—
a fantastically precise estimate for one who does not believe in making fore-casts—
of the increase in the cost of living arising from the March measures, an increase which was wholly due to the increase in nationalised industry prices.
The House was surprised by that statement. We know that a number of the price increases caused by the April Budget were due not simply to increases in nationalised industry prices but to the increase in VAT. The right hon. Gentleman's statement was simply untrue, and I hope that he will feel able to apologise for it.
At all events, it is clear that an increase in the cost of living was caused by the Chancellor in April by increases in taxation and other measures. Now we have something of an offsetting arrangement. But simply switching back and forth between April and now does not cancel out the effect, because the threshold has been triggered, and once one pulls the trigger the bolt has gone.
The reality is that, overall, if anything the net effect of the two sets of proposals together has been to raise the cost of living rather than reduce it. But, of course, last night on television the Chancellor put forward a reassuring and happy scenario. His measures, including the ones in April, were going to have the effect of offsetting the inflationary trend; they would avoid a further triggering of the threshold; better commodity prices were around the corner—the right hon. Gentleman seemed to imply that he would take some credit for that expectation and its fulfilment—and a little later North Sea oil would be flowing and all would be well.
I was reminded of the magazine thriller. The writer of one episode left the hero tied to a railway line with an express approaching and every conceivable obstacle to his rescue in the way. The man who began the next episode got over the difficulty by saying, "With


one splendid leap our hero extricated himself from his predicament." That is like the Chancellor's performance on television last night, and reflection on the figures shows how optimistic his scenario is and how his measures do virtually nothing to improve the situation. In anything but the very short term they may well make the position substantially worse than what it now is.
On the basis of the Chancellor's own calculations, and taking an optimistic view of the extent to which reductions in indirect taxation are reflected in a reduction in prices, it is claimed that the eventual effect of the Chancellor's proposals, allowing for the effects of thresholds and so forth will be to reduce the retail price index by about 2½ per cent. But in the last four months the index has gone up by 0·9 per cent. in March, 3·4 per cent. in April, 1·4 per cent. in May and 1 per cent. in June. The average is between 1·6 per cent. and 1·7 per cent. per month—or let us be fair to the Chancellor and call it 1·5 per cent. Even on that basis it must be the case that the effect of the Chancellor's measures will be cancelled out in a short time, perhaps in two months or in only six weeks. Therefore, to put forward the kind of optimistic scenario which he presented on television last night is to a considerable extent to cloud the real problems facing the country and to cloud the fact that for reasons which I shall show in a moment his proposals are irrelevant to the country's fundamental problems.
Against a background in which the harriers against wage inflation have been steadily reduced by the Government and in which the Secretary of State for Employment seems positively to be encouraging wage increases, we must take account of the effect of the Chancellor's measures on the level of demand. I wish to spend a moment or two dealing with what the amendments would cost which we carried as a Conservative Opposition on the Finance Bill, with the support of other parties. It is becoming boring to hear the Chancellor going on and on about a figure of £500 million, which has no foundation. Four amendments were carried, most of them—

Mr. Healey: I am sure that the hon. Gentleman will agree that I have always quantified this as the cost of the amend-

ments put down. I hope that the hon. Gentleman, even if he is prepared to deduct the cost which would have arisen from an amendment on which in the end he wisely decided not to vote, will at least include the cost of the amendments on which he voted but failed to convince the House.

Mr. Higgins: With respect to the Chancellor, he cannot hope to get away with that. I have been speaking rather longer than he has on Finance Bills, or at least from the Front Bench, and I know that nobody adds up the total cost of all the amendments put down in order to establish a point or to get an answer from the Government. I trust that the Chancellor will not try to wriggle out of the main point.
We had four amendments carried. One related to charity pools and this, on the Chancellor's own admission, represented a cost of £1 million. Another related to relief for small businesses from corporation tax, which involved a cost of £15 million. Another dealt with the restoration of the investment income surcharge which, according to the Chancellor. would cost nothing this year but £40 million next year. The remaining amendment dealt with value added tax related to leasing and it is clear from what the Financial Secretary said, and if the case involved in this matter is fought in the courts, that the cost this year will be nothing. The sum total involved in those amendments for this year is £16 million. It is important to get this clearly on the record.
The Chancellor bumbled on about benefits for speculators. As my right hon. Friend the Member for Carshalton (Mr. Carr) pointed out very clearly this afternoon, we were most careful to establish that speculators would not benefit at all. The Chancellor goes on about pools. I must point out that it is charity pools with which the amendment was concerned. It cost £1 million. It is grossly deceptive to bandy around the word "pools" in some pejorative sense without putting in front of it the word "charity".

Mr. John Pardoe: Is the hon. Gentleman aware that his figure of £16 million could have been substantially reduced if the Government


had accepted our amendment on mortgage relief, because it has now been confirmed in answer to a Question that the sum involved would be £15 million? We would have saved the Government £15 million so that the total cost of our amendments this year would have been £1 million.

Mr. Higgins: That is an interesting point which the House ought to consider.
There is another point I wish to raise. I had occasion to say this to the right hon. Gentleman when he was in Opposition and I am rather surprised that the Treasury has not given him better guidance on the matter since. His debating technique in this House is simple. It is to make one statement after another which is not true. If he is interrupted he stands up and disputes it—

Mr. Healey: rose—

Mr. Higgins: I will finish this point. If the right hon. Gentleman is interrupted he disputes it, and if he is pressed he eventually concedes that the point is not as true as he suggested—then he does exactly the same thing again. He does this time and again because he knows that the House will not tolerate innumerable interruptions. Sooner or later he wears down the opposition and gets away with it. He extends this technique. If someone else is on his feet he does the same thing again and again, making an assertion which breaks up someone's speech completely. I am prepared to take the risk so I will give way.

Mr. Healey: The hon. Gentleman is making a very serious and I think un-parliamentary allegation. He has said that I have been making statements that are not true. I challenge him to quote one remark I made about the effect of the amendments moved by the Opposition which was not true.

Mr. Higgins: If the Chancellor is prepared to accept the figure of £16 million I am happy with that.

Mr. Healey: On a point of order, Mr. Deputy Speaker. The hon. Gentleman has just accused me of making a statement that was not true. He has totally failed to substantiate that statement. I should be grateful if he would now quote any statement that I have made on the

Government's behalf during the Report stage of the Finance Bill which is not true. If he cannot, I seek your assistance in requiring him to withdraw his allegation.

Mr. Higgins: I give the right hon. Gentleman the example I gave a moment or two ago. He must not get so worked up about it. I quoted the argument about whether one of the amendments benefited land speculators. It is clear from what the Chief Secretary said, it is on the record of the Committee HANSARD, that the amendment which was carried did not have the effect he suggests. The right hon. Gentleman's technique is to make this kind of intervention and to break up a speech. I invited his intervention and I am happy to have knocked it down.

Mr. Healey: Totally unfair.

Mr. Higgins: No. On the contrary, I have substantiated my point 100 per cent. The right hon. Gentleman asked for one example. I have given him one and I will not weary the House with more.
I come now to this question of the pattern and level of demand as affected by the Chancellor's measures. He said that under the previous Government there had been profligate irresponsibility relating to increases in demand. In reality the situation last autumn, before the three-day week and the oil crisis, was such that the rate of increase in demand was coming down from an increase of 5 per cent. a year, which was intended to mop up unemployment, to 3½ per cent. It was not profligate irresponsibility to achieve that objective.
The level of demand was going up roughly in line with productive potential. More particularly, the increase in consumption had come down from 6½ per cent. to 3½ per cent. Investment was gradually improving and exports were going up. This is a quite different situation from that which the Chancellor is promoting with his measures. The Chancellor is increasing consumer demand, whereas the Conservatives laid emphasis on investment and exports.
The right hon. Gentleman asked me to give another example of his misleading the House. In the Budget debate this year we discussed the question of investment intentions related to the CBI survey. The Chancellor gave a totally false


impression of what that survey showed. He saw it a few minutes ahead of everyone else. When we looked at the survey we found that it was not nearly as optimistic as the Chancellor led the House to believe.
In the April Budget, and in the Chancellor's proposals now, there is clearly an attack on profitability in British industry. There are massive increases in ACT and corporation tax. There is a basic difenece in attitude between the two sides of the House, and it is necessary to trace why that is so. The Chancellor should have heard the speech made by his hon. Friend the Member for West Stirling-shire (Mr. Baxter) on the subject of small businesses. The Chancellor clobbers various parts of industry and his right hon. Friend the Member for Bristol, South-East (Mr. Benn) says that industries are not profitable. One only has to think back to his policy on Beagle aircraft at the time of the previous Labour Government to realise what a bad judge of these matters is the right hon. Gentleman. Instead of encouraging industry, instead of relieving the burden of taxation which he imposed on companies in his April Budget, the Chancellor has gone for an increase in consumer demand.
I turn, finally, to the balance of payments. We welcome the fact that the non-oil deficit is falling, but we always believed that it would fall, and we said so time and again. We thought it right to sustain growth and to borrow to cover the deficit in the meantime. We said that the J-curve effect would eventually come through. Come through it has, and we welcome it. But will the measures which the Chancellor proposed yesterday improve that situation?
By increasing consumer demand it is likely that the Chancellor will suck in more imports, particularly of consumer goods. By increasing consumer demand it is likely that he will reduce the incentive to export. One of his many changes in policy between the April Budget and now is that, instead of saying that we must have reasonable investment to meet the export demand, he is putting more emphasis on domestic demand, which is dangerous for our balance of payments position.
The right hon. Gentleman is right to stress the danger of a world slump. Anything that we can do by way of inter-

national co-operation to avert that danger we should and must do, and the right hon. Gentleman will have our support in that. But, as my hon. Friend the Member for Manchester, Withington said, there are limits to the extent to which we can go it alone. We must proceed by international co-operation. There are grave dangers if we tend to reflate when our competitors are not doing so.
In his television broadcast last night the Chancellor said that too many people were talking down Britain. The Opposition are not talking down Britain. We are asking the Chancellor to appreciate that we are in a deeply serious situation. We need to encourage industry and, above all, to restore confidence.
I do not think even the Chancellor of the Exchequer, looking at the Press this morning and business reaction in many sections of industry, can believe that the measures which he proposes will succeed in restoring confidence. For that reason my colleagues and I deeply regret the measures the Chancellor has taken. We believe that they amount to a lost opportunity.

9.30 p.m.

The Paymaster-General (Mr. Edmund Dell): The debate in many ways has been revealing. We have had from the Opposition Front Bench, though less from the Conservative back benches, the claim that when we took over in March we had an economy running in perfect balance. The hon. Member for Worthing (Mr. Higgins) made a somewhat desperate attempt, with a few figures selected out of the air, to substantiate that claim. Instead, we faced a grave situation.
The hon. Gentleman said that the present situation was deeply serious. I do not deny that. But it did not become deeply serious on 4th March or at any time subsequently. The situation which we took over when we became the Government was serious. I am sure the Conservatives will not deny that. The claims made by the hon. Gentleman were not substantiated by his Conservative colleagues on the back benches. On those benches there was a deeper realisation of the real position we faced.
I should like to recapitulate the situation we found when we took over. We faced the largest balance of payments deficit in history. Our country had been


brought to the brink of collapse by the greatest piece of generalship since the charge of the Light Brigade. The public sector borrowing requirement stood at record levels. We have recently had the splendid sight of a former Treasury Minister in the Conservative Government telling up how valuable it is to have a balanced Budget.
The right hon. Member for Carshalton (Mr. Carr) said this afternoon that my right hon. Friend was like a man attempting to cure the wasting disease of TB with a bottle of tonic. The right hon. Member for Altrincham and Sale (Mr. Barber) had something better than a bottle of tonic. He had a £4,400 million public sector borrowing requirement to act as the tonic on the economy. The money supply bounded ahead, despite assurances from the then Treasury bench and from the former Prime Minister. This was an assurance which has recently been reflected in an appendix to a letter by the monetarist economists. It was that money supply was to be brought under control and that it was a great objective of the then Government.
We also saw under the Conservatives a race of inflation—a rate which did not begin on 4th March 1974. The hon. Member for Worthing sought to question what my right hon. Friend the Chancellor of the Exchequer said earlier this afternoon about the effect of nationalised industry price increases. That was the substantial fact which resulted in the total overall effect of the Budget being to produce a price increase. Without the nationalised industry price increases, there would have been a slight positive effect on the retail prive index—namely, a slight reduction. But it was the nationalised industry price increases—increases which the right hon. Member for Altrincham and Sale confessed were required—which put the figure up by 2 per cent. and produced the increase to which the hon. Member for Worthing referred. There is no doubt about those figures. They have been published.

Mr. Higgins: I find that an extraordinary argument. What the Chancellor said yesterday was that the increase in the cost of living arising from the March measures was an increase wholly due to the increase in nationalised industry

prices. A number of things can go to make up an increase and one can say, "We shall count that one and not the other". It depends which one is put on top of the pile. But it is nonsense to suppose that VAT had no effect on the rise in prices in April.

Mr. Dell: My right hon. Friend in March in introducing his Budget had to take into account, along with the price increases resulting from VAT, price reductions resulting from food subsidies and the rent freeze. But the positive effect of that was cancelled out because we had the duty—a duty shirked by the Conservative Government—of putting up the prices in the nationalised industries to reduce their deficit—namely, to reduce the subsidy we otherwise would have had to pay on their products to a figure of £500 million. This was the record of the previous administration. This was the situation that we inherited. It was mitigated only by the December measures—the last minute attempt to wrench round the bearing of the country's economic policy by means of public expenditure cuts and the supplementary scheme.
There has been considerable discussion today about fine tuning. The hon. Member for Kingston-upon-Thames (Mr. Lamont) was one who made this point, and the hon. Member for Caernarvon (Mr. Wigley) advanced the opposite argument. There has been an expression of scepticism about fine tuning. May I put to the hon. Member for Kingston-upon-Thames a recent classical restatement of the conventional wisdom about fine tuning which came from the Leader of the Opposition on 26th March after my right hon. Friend's Budget statement? The right hon. Gentleman said:
Perhaps it is time every right hon. and hon. Members stopped pulling the leg of successive Chancellors if, at different times of the year, they propose to take action to alter the course of the economy … we may accept the difficulty of keeping the economy working with a reasonable momentum and accept that, particularly in the uncertain state of the world today, Chancellors will have to adjust from time to time and that it is right that they should do SO."—[OFFICIAL REPORT, 26th March 1974; Vol. 871, c. 333.]
What better blessing could my right hon. Friend have than those words for producing this slight adjustment to the course that he chose last March?
The Leader of the Opposition made a speech yesterday in which he instructed the people to beware of politicians bringing gifts. I approved of that message. I repeat it: beware of politicians bearing gifts. But the right hon. Gentleman instructed my right hon. Friend the Chancellor of the Exchequer to come bearing gifts. if necessary to keep the economy working "with a reasonable momentum". That is what the right hon. Gentleman said, and that is what my right hon. Friend has considered it necessary to do on this occasion.
The economic justification for this package and for the slight adjustment that it involves to the March Budget judgment is, first, the unusual uncertainty of the position last March at the time of the Budget statement: for example, the amount of deflation working through the economy and the exact effect of the three-day week. Secondly, there is the fact that my right hon. Friend inherited an economic situation arising from a policy which was the product of two contradictory forces—the vast reflation launched by the right hon. Member for Altrincham and Sale at the end of 1971 when he was fearful of unemployment reaching totally unacceptable levels, and then, in the opposite direction, the large public expenditure cuts last December.
Today, the right hon. Member for Carshalton gave us a lecture on the need for firm judgment and constant direction. The hon. Member for Worthing has just accused my right hon. Friend of taking an erratic course. These are all no doubt wise guidance for Chancellors of the Exchequer. But they come a little oddly from the Opposition.
In the circumstances of uncertainty arising largely from the three-day week and from these conflicting courses selected at intervals by the right hon. Member for Altrincham and Sale, it was right for my right hon. Friend last March to have a neutral Budget and to warn that probably he would need to amend his course during the year. I noticed that even Mr. Wynne Godley, with his preference for fixed reference points, sees the need for some adjustment now. In fact the adjustment is not a major one.
Much of the debate has been taken up with the problem of inflation. Obviously this is a serious problem. It is perhaps

the greatest problem now, but there is no need to rank it among our problems. Great emphasis has been laid on it and it is certainly a grave problem.
The right hon. Member for Taunton (Mr. du Cann), in an impressive speech, laid emphasis on the problem of inflation. As my successor as Chairman of the Public Accounts Committee, I wish him well. I confirm what he said about the value of the Public Accounts Committee in ensuring value for money—and, incidentally, value for North Sea Oil. The right hon. Gentleman said that inflation was a serious problem, but he was less strong on remedies than on analysis of the problem. He emphasised the need to tell the truth. Of course we must tell the truth. I wish that the problem were so simple that that alone was enough But we have one fortunate fact in the situation which the House should not underrate. The TUC has told the truth. It has said that there is no room for a general increase in the standard of living this year. That is a most valuable statement of the truth.
I would make two points about our present problem of inflation. First, this package should not provoke demand inflation. That point was excellently made by my hon. Friend the Member for Gateshead, West (Mr. Horam). It will not put the economy under any strain.
Secondly, to deal with inflation we require both power and influence. We are exerting influence through the social compact. The Government are fully delivering their part and have delivered more in this package with the increase in the regional employment premium and the direct action that we have taken on prices. Direct action on prices is particularly valuable because it prevents some triggering of the threshold. On some occasions we can be a little uncertain about the effect that direct action on prices will have on an inflationary situation. There is an automatic consequence here. It prevents some triggering of the threshold.
The other factor that the Government must have and conserve is their power: for example, through price control—as the House knows, the price code is being reviewed—and through their control over the money supply which we believe will not be greatly affected by the increase


in the public sector borrowing requirement and to which my right hon. Friend has emphasised he attaches great importance. But I agree with my hon. Friend the Member for Gateshead, West that the money supply cannot be used as a bludgeon against one section of the population.
Fortunately, we see signs of a fall in commodity prices. These should help to fight inflation. To say that is not to gamble on a fall in commodity prices. It will or it will not happen. At the moment there are signs that it will happen and, fortunately, we may be able to take advantage of it.
My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) called for an increase in trained manpower. That is an important point which is also relevant to the fight against inflation.
Reference has been made to the balance of payments situation and how my right hon. Friend's package of measures will affect the outlook. My right hon. Friend explained that this is a prime objective and that nothing that he has done should change the fact that there should be a substantial fall in the deficit next year. Indeed, one of my hon. Friends quoted the OECD forecast today.
The hon. Member for Worthing told us that the package will reduce the incentive to export. Any such reduction, given the short-term demand effect of the package, must be small. I emphasise that there is nothing in the package which should prevent a substantial fall in the balance of payments deficit next year.
It is essential to deal with that deficit. One strong reason is that we must limit borrowing as far as possible. A great deal of borrowing will be inevitable if we are not suddenly and rapidly to bring the economy to a halt in a desperate attempt to correct the imbalance. But it is essential to limit it because borrowing can expose us too much to movements of foreign confidence, it is increasingly costly and the total cost of large borrowing can of course be a drag on any improvement in the situation that we can achieve over the years.
On the other hand, it is not true, as the hon. Member for Kingston-upon-Thames said, that we have mortgaged

the North Sea several times over. Nor must we do so. We must bring the balance of payments under control, but not too rapidly, having regard to the consequences of what we do for employment. In any case, we have to bear in mind, for some years ahead at any rate, that the problem of bringing the balance of payments into better balance will be exacerbated by the limited import capacity of at least some of the oil producers.
We should like to see an adjustment in the restrictive policies of some developed countries, so that we can all achieve better equilibrium in our balance of payments. But if that does not happen, we must do what we can to safeguard our own position.
One question of major importance is how industry will respond to the pressures and opportunities of this time. We have heard the usual grudging comments of the CBI on my right hon. Friend's package. We listened to their advice carefully and we know that even when we take it we must discount their sour words in advance. They wanted only a mild reflation, so I am not sure what more they could have expected my right hon. Friend to do. But to be fair, whatever the sour words of the CBI, industry has been responding in exports, although less in terms of investment. Now industry should have more liquidity as a result of the regional employment premium increase and other reasons. The lower commodity prices should also help liquidity.
There has been a modification of dividend restraint and some additional domestic demand. But my right hon. Friend has not received much recognition for the relaxation in dividend restraint that he announced yesterday. There is an interesting quotation in this morning's Guardian from a Mr. Colin Mitchell, a stockbroker, of Sheppards and Chase:
Many companies were happy with the 5 per cent. limitation because it helped to improve their liquidity position.
It is always better to be able to blame the Government; that is a typical response from too much of industry.
However, my right hon. Friend's power to increase domestic demand was limited. While such an increase might have been some encouragement to industry, it would have been the wrong form of encouragement. His power was limited by the fact


of overseas confidence and the need to give priority to exports. Also, the unit cost argument which industry has so often advanced as a justification for relaxation of control over domestic demand in order to promote exports has not always been a good one.
I would simply say to the spokesmen of industry that we are in a difficult period, with a high balance of payments deficit and a high rate of inflation, but that not everything depends on the Government. Industry has a rôle too. It has been said that there is nothing in the package to encourage investment. It is not just for Governments to encourage investment; decisions about the planning of investment are for industry to make. Exports are 30 per cent. of manufactured production, and swiftly rising exports should encourage investment. Industry is ill-advised to turn too frequently, too avidly and too expectantly to any Government. The best answer to criticism of industrial management in the United Kingdom would be success, not a catalogue of excuses for failure.
The right hon. Member for Carshalton said, for about the tenth time, that my right hon. Friend the Secretary of State for Industry has sapped industry's confidence. I would say to him that the whole economic position of this country would have been transformed had industry during the Tory years invested with confidence. There has also been criticism during this debate that the element of expansion of demand included in my right hon. Friend's package could lead to long-term unemployment, or unemployment in the long term, whatever it did to the cost of living in the sort term. This, apparently, would happen through the mechanism of inflation.
First, the emphasis is not on consumption. For example, because we wish to avoid such an emphasis we have not relaxed hire-purchase controls. The regional employment premium will give a stimulus to employment in the regions and help with company liquidity. I was grateful to my hon. Friend the Member for Lanarkshire, North (Mr. Smith) for pointing out the emphasis we have placed on regional policy in our concern for the regions. Secondly, a large part of the problem at the moment is not excessive consumption but that there has been a large adverse movement in the terms of

trade, the result of increases in the price of oil and other commodities. We cannot balance our payments all at once because the oil producers cannot buy enough. Therefore, there is danger of unemployment coming through from the deflationary effects of oil price increases.
Thirdly, in so far as there is truth in the comment that increases in domestic demand can lead in the long term to greater unemployment than can the effect of deflation, it is better directed at the Front Bench opposite. Ill-advised demand management measures bringing about consumption-led booms have again and again in the past distracted industry from the need to improve the balance of payments and thus to give full employment a more secure place.
The hon. Member for Worthing attempted to defend the profligacy of his right hon. Friend the Member for Altrincham and Sale. He attempted to defend the public sector borrowing requirement in 1973 and its demand effect at a time when the competitive exchange rate should have been pulling resources far faster into exports. When the right hon. Gentleman suggests that my right hon. Friend's minor increase in domestic demand will divert from exports, I would throw back at him the question: what else could have been achieved by his right hon. Friend's policies? To me that policy of his right hon. Friend seemed a kind of macro-economic lame-duckery parallel to the Industry Act of 1972 which was intended to deal with the problems of particular firms. This was dealing with the problem nationally. He took the whole economy as his farmyard. At the time, it semed to me, it was evidently the judgment of the right hon. Member for Altrincham and Sale that all this great deficit was necessary, even with a competitive exchange rate, to bring unemployment down even to 500,000.
My own view is that full employment is not secure when it is dependent upon Budgetary extravagance of this kind. This is where we have arrived through nearly 20 years of Tory demand management. It is not Labour Chancellors of the Exchequer who typically have unleashed consumption-led booms. Labour Chancellors have endeavoured, often at considerable political cost, to force the movement of resources into the balance of


payments. What in the end does produce the secure long-term basis for full employment is a better balance in our affairs internationally.
We are emerging from a period of Tory rule. We have seen a period of complete irresponsibility in running cur economic affairs. Nothing which can be said by hon. Members of the Opposition can alter the inheritance which we had to accept in March 1974. We have had a deliberate or misguided generation of inflation and an import boom. Again, I cannot know how hon. Members of the Opposition can disguise the effect on our balance of payments of the import boom generated by the policies which were followed under their Government. We have had the printing of money turned into an instrument of policy. For these people to turn on my right hon. Friend for the slight adjustment in his March Budget judgment shows how far their appetite for power has outrun their capacity for it.
The hon. Member for Worthing put to us the question of what we think about threshold agreements and whether we are in favour of them. I shall give him a simple answer. When the Conservative Government introduced the threshold agreements last October they expected a fall in commodity prices, and they assumed that there was a possibility in the period following of quite a substantial increase in the standard of living of the people of this country. Otherwise, there was no justification for the first 6 per cent. stage in the system under which they introduced the threshold agreement.

To introduce it in those circumstances could only fuel inflation. That is what they have done and that is what we have inherited. To have as a result of free collective bargaining a threshold system in circumstances in which commodity prices were under control would be an entirely different situation. We do not rule that out in that situation. It is no use just throwing the question at us and pretending that in all circumstances threshold agreements are wise.
The introduction of threshold agreements by the Tory Government was just one more example of the way in which their policies have fuelled inflation and have created the situation with which we now have to deal and with which we shall deal—with which we had to deal previously, and dealt with successfully previously. We shall lead this country into a better situation in its affairs, with full employment far more securely based than anything which has been achieved by right hon. and hon. Members of the Opposition.

Mr. James A. Dunn (Lord Commissioner of the Treasury): I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

BUSINESS OF THE HOUSE

Ordered,
That the Independent Broadcasting Authority (No. 2) Bill, the Merchant Shipping Bill [Lords] and the Northern Ireland (Young Persons) Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour,—[Mr. James A. Dunn.]

PRIVATE BUSINESS

BRITISH RAILWAYS BILL

Order for Third Reading read.

[Queen's Consert, on behalf of the Crown, signified.]

Motion made, and Question proposed, That the Bill be now read the Third time.

9.59 p.m.

Mr. George Cunningham: I have already explained to the House on two occasions the contents of the Bill, when it was given an undivided Second Reading in April and when it came back to the House last month after going through an unopposed Private Bill Committee. Therefore, I shall not go over the content of the Bill yet again this evening.
The Bill is a miscellaneous Bill which contains a large number of small provisions and some more important provisions, relating to various parts of the country, providing for the construction of some stretches of railway line, for the removal of some stretches of railway line, for the provision of some level crossings, and such like matters. Hon. Members have all received a brief from the promoters of the Bill, the British Railways Board, explaining the contents of the Bill to them.
The Bill has had a very slow progress through the House in the last Parliament and in this one. It started in January and was blocked at the beginning of the year by the hon. Member for Essex, South-East (Sir B. Braine) and one of his colleagues because of two provisions contained in the Bill at that time. One related to the power to construct a railway line to and over Maplin Sands, and that provision has since been removed in the light of the Government's new policy on Maplin. The other provision, to which the hon. Member for Essex, South-East took exception, is that which authorises British Rail to construct a one-mile stretch of railway track to a proposed refinery site on Canvey Island.
I must say again what I have said on the two previous occasions when the House has considered this Bill—that this

Bill does not authorise the refineries to be constructed on Canvey Island. Its only relevance to the refineries is that the Bill permits British rail to construct a railway link from the main London-Southend line to the proposed site of the refineries. I think I should endeavour to remove all doubt about the extremely modest nature of the proposal, which is the only ground on which exception is taken to this Bill.
The distance from the main line to the proposed refinery site is approximately two miles and the first mile of the connecting spur was authorised in the British Railways Act, 1972. The House, and Parliament as a whole, has therefore authorised the construction of one mile of railway track from the main line halfway towards the site of the refineries, and that one mile takes the track up to the creek separating the mainland from Canvey Island, over the creek and for about one-third of a mile on Canvey Island itself. The relevant clause of this Bill only permits that spur line to be further extended by one mile to reach the proposed site of the refineries, and of that one mile about one-third will be within the proposed refinery area.
When this matter was last discussed last month the hon. Member for Essex, South-East suggested that it would be preferable if the product of the refineries were transmitted not by rail but by pipeline. I suggested then to the House that there were technical objections to that alternative and I want now to give the House the expert guidance which has been provided on this point.
Not all products of refineries can be transmitted by pipeline. It is an inherent characteristic of heavy industrial fuel oil that it will become very viscuous or even solid and unnumnable at normal temperatures. It must be maintained at relatively high temperatures, say about 130° F, throughout the length of the pipeline. To maintain oil at that temperature in pipes within the boundaries of, or adjacent to, the refinery is a relative simple matter. Pipes are heated with steam supplied for the purpose which is readily available and reliable, and the pipelines are above ground, easily accessible and usually short in length.
But for long, buried cross-country pipelines outside the refinery heating is


not a practical proposition. If the pumping of heavy fuel oil should be on a continuous basis, and the oil can pass through the line at sufficient velocity, it is possible to rely on sufficient insulation retaining sufficient heat in the heavy oil during its transit without external heating of the line. However, output from, and consequently input to, a rail depot is intermittent and irregular, and thus continuous pumping of heavy fuel oil to it via a pipeline is not practicable. It is for that reason that the hon. Member's suggestion of a pipeline to connect the refinery to a transmission station is impossible.
There are other objections. For example, it would mean that the transmission of the oil from the pipeline to the railway waggon would be at a point very close to an area of dense population—closer to that area of dense population than the sidings proposed in the Bill.
The House has given the Bill an unopposed Second Reading, and the Bill has been to a private Bill Committee and has been passed with amendments. One of the most important amendments made in Committee was one which was enthusiastically desired by the hon. Member for Essex, South-East. When the Bill came back to the House for consideration last month the hon. Member moved an amendment to delete the provision concerning a Canvey rail link. On a vote the amendment was defeated by 141 votes to 59, a majority of 82.
When the Bill leaves this House it will go to the House of Lords. Hon. Members understand that Private Bills are unlike public Bills in that they may continue from one Parliament to the next, and it is expected that this Bill will do that. In the House of Lords the Bill will have to go through the same rigorous processes for consideration of any petitions against it as that through which it has already gone in this House. Any local authority objecting to the Bill, therefore, will have its opportunity to use the processes laid down by Parliament for a rigorous examination in a quasi-judicial atmosphere. Tonight, therefore, the House has only the choice of passing the Bill or killing it.
I invite the House to consider seriously what would be the consequences of kill-

ing the Bill. Clause 23 extends for a further period of years the powers of the police to stop, search and arrest persons suspected of theft on British Railways property. The powers are conferred under previous legislation on a temporary basis, and so they have to be extended for a further period of years every few years. The current powers run until 31st July—a week tomorrow. If the Bill is killed tonight it will be impossible as from a week tomorrow for British Transport Police, or any other police—because their powers on British Railways property depend on the same legislation—to stop, search and arrest persons suspected of theft on British Railways property.
On Thursday this week, at the request of the Opposition, we shall debate law and order. It would be curious if on Tuesday of this week the House were to choose to defeat the measure and so deprive the police of essential powers for controlling theft on British Rail property.

Mr. A. J. Beith: Does the hon. Gentleman realise that on a number of occasions in Committee it was pointed out to the British Transport Docks Board and British Rail that their choice of private legislation to seek such powers was far from satisfactory, and that it would have been much better if they had used general public legislation to obtain the powers? It is hard to imagine the Home Office looking unfavourably on attempts to deal with such powers in the proper place, namely public legislation.

Mr. Cunningham: I completely agree with the hon. Gentleman, but the distinction between private and public legislation is that private authorities do not promote public legislation. It is right that the powers I am talking about, police powers, should be conferred in public legislation, but they are not so conferred at present, and British Rail cannot promote a public Bill to change that. Governments of all parties have tolerated the situation over the years. If some Government at some time want to change it, they can do so, but until that day comes we have given British Rail certain concessions, and they are doing the only thing they can, by putting into the legislation which they promote power to extend the police powers which they now enjoy.
I. hope that the hon. Gentleman will pursue his point on another occasion when there is time to do something about it—we certainly do not have time between now and next Wednesday—so that this kind of provision does not in future have to be part of private legislation promoted from outside the House by nationalised industry. I hope that hon. Members understand the difficulty of nationalised industries and local authorities in promoting legislation from within the House when they are not in any normal sense represented in the House.

Mr. Norman Tebbit: Would it not be a satisfactory way out of the problem, which is one of a Bill which contains both desirable and undesirable objectives, according to the hon. Gentleman, if British Rail were to give an undertaking that if the Bill went through the House it would not take advantage of the provision which relates to the construction of the railway line to which my hon. Friend the Member for Essex, South-East (Sir B. Braine) objects? In that way British Rail could have its police powers without any further problem tonight, and my hon. Friend would be satisfied.

Mr. Cunningham: The hon. Gentleman's proposition is that the proposal relating to the Canvey link-line could be left in the Bill but not used. A much more satisfactory proposition was considered by the House last month, that the proposal should be deleted from the Bill, and it was resoundingly defeated. No nationalised industry is likely to take on an understanding that it will not implement powers which it is given in the Bill. But the British Railways Board will implement the powers only if the refineries are there. If the hon. Member for Essex, South-East is successful in stop, ping the refineries from being completed on Canvey Island, British Rail will not proceed to construct the railway line. There are many authorisations for action in private legislation which are not taken up if there is not a practical justification for them.
The House faces a simple choice tonight. The House either passes the Bill, it having been rigorously considered, or it defeats the Bill, with the serious consequences to which I have drawn attention. The Bill has been badly de-

layed since January this year, and there will be some serious consequences of that delay, even if it goes throughout the remainder of its passage in the speediest manner possible. Therefore I hope that the House will after a very brief debate—I am sorry to have spoken so long—now give it its Third Reading.
Finally, may I draw attention to the statement which it seems the hon. Gentleman has made to the Press today about our proceedings—

Sir Bernard Braine: I have made no statement to the Press. I hope that the hon. Member for Islington, South and Finsbury (Mr. Cunningham) will withdraw.

Mr. Cunningham: I just want to draw the attention of the House to the statement which I have read on the tapes today, which says that the hon. Member for Essex, South-East (Sir B. Braine) plans to block the Third Reading of the Bill. It is said that he intends to move,
That the Bill be read the Third time upon this day six months".

Sir Bernard Braine: That is on the Order Paper.

Mr. Cunningham: It is said that the hon. Gentleman admitted that there was no certainty that he would get away with these tactics but that his object was to make Parliament listen to his case. I think that the House has listened to his case with great interest on several occasions, and no doubt we shall do so again tonight. I hope that this occasion will not be taken further to delay a Bill which it is now essential to pass quickly and which if defeated would leave British Railways in an impossible situation regarding the security of its property.

10.16 p.m.

Sir Bernard Braine: I rise to oppose the Third Reading of the Bill. As the hon. Member for Islington, South and Finsbury (Mr. Cunningham) has made clear, I object to only one provision in the Bill—namely, that which is contained in Clause 6 which enables British Railways to construct a railway line and sidings to serve the oil refineries on Canvey Island.

Mr. Speaker: Is it true that the hon. Member for Essex, South-East (Sir B. Braine) intends to speak for three hours?

Sir B. Braine: If, Mr. Speaker, you will be patient with me, as I hope you will, it will be seen as I develop the case against the Bill that three hours is scarcely sufficient to express the feelings of answer, frustration and bitterness of my constituents. However, I shall endeavour to confine my remarks to as short a time as possible.
Hon. Members will know that my objection to the proposal in the Bill is not based on some small trivial point, some mere technicality, but upon a matter of very great moment. If Parliament gives these powers to the British Railways Board it will enable it to add an additional fire hazard to an already endangered environment. My answer to the plea from the hon. Member for Islington, South and Finsbury for the swift and uninterrupted passage of this measure is that its promoters could have had it some weeks or months ago had they possessed the imagination and the sensitivity to understand that this seemingly simple little provision touches upon a matter of the gravest concern to thousands of my constituents and to the elected local authorities within my constituency.
The Castle Point District Council covers an area which happens to be controlled by the local Labour Party. As will be apparent from what I say later, they simply do not understand how it is possible that 140 of the colleagues of the hon. Member for Islington, South and Finsbury, most of whom had not even bothered to listen to the case, marched into the Lobby on an amendment to a Private Bill which touched on the interests of only one constituency. The Labour Party in South-East Essex finds it difficult to understand the attitude of the hon. Gentleman and his hon. Friends.

Mr. Cunningham: I understand that it is possible that the Castle Point authority would wish to petition against this part of the Bill. Does the hon. Member for Essex, South-East not agree that it would be best for it to do so in the House of Lords, where the matter would be considered according to the rigorous procedures of petitioning a Private Bill before a Private Bill Committee rather than for the matter to be thrashed out yet again, in terms which we have all heard before, on the Floor of the House?

Sir B. Braine: The night is young. I shall deal with this point in some considerable detail. If the hon. Gentleman wishes to help me with interventions of that kind, I am more than willing to permit him to do so.
The fact is that British Railways chose to ignore the concern of my constituents, to brush aside my request on Second Reading to drop this unwelcome provision, and, when I put down an amendment on Report, to rely upon Labour Members to defeat it who had not even heard the argument. Yet as I shall demonstrate later, the provision is unnecessary as well as objectionable.
I emphasise again at this early stage of my remarks that I have the support of the local authorities and of the vast majority of my constituents in fighting this measure by every means I can muster. Thus, all that the British Railways Board has succeeded in doing so far, together with the skill and ingenuity of the hon. Gentleman, is to enable me to delay the passage of the Bill to the point at which Parliament at long last will hear our case in detail, and for that I am extremely grateful to the board and to the hon. Gentleman.
I make no apology for having embarked upon this course, because the safety, the health and the peace of mind of my constituents are directly involved. These are the interests which, as Edmund Burke told his constituents in Bristol 200 years ago, I should prefer to any interest of my own. Indeed, as will become clear, who can be sure that, in a situation where, over a decade, there has been a persistent and wilful refusal by successive Government to consider the totality of the effect of hazardous industrial developments of this kind upon the environment of my constituents, the greatest interest of all—human life itself—is not being endangered?

Mr. George Cunningham: I shall not allow myself to be provoked again, I promise. But does the hon. Gentleman remember another remark by Burke? When Burke was asked by a lady if he really believed all the stuff and nonsense he sometimes spoke, he replied:
Gad, Madame. Does any man swear to the truth of a song?

Sir B. Braine: I remember a great deal of Burke and the hon. Gentleman will, I


think, be sorry for trying to introduce a note of flippancy into a debate which, as the evening wears on, will be seen to be reflecting the views of a very large number of people who are gravely worried.

Mr. Cunningham: indicated assent.

Sir B. Braine: I notice that the hon. Gentleman is nodding assent. Indeed, when the story is told, I think that the House will be horrified, because it has never been told in full before.
It is my submission that this Bill gives British Railways powers that it should not have and that it is in the interests of my constituents in South-East Essex that those powers should be shown to symbolise what they are—an evil which so far the House has not insisted on removing. That is a matter for hon. Members to debate with their consciences.
For me, my duty is clear. It is to spell out in the greatest detail why that evil, serving as it does a still greater evil, should be removed. That is what I propose to do. It is a bitter story. It involves Ministers in successive Governments whose failure to apprehend the situation has been matched only by their arrogance. It also involves the Prime Minister, who thought it worthwhile to exploit the anxieties of my constituents by giving them a pledge during the General Election that he would review the whole matter—a pledge which he has so far unhappily failed to implement.
It is a story with a message for every community that believes its environment to be in danger. Across the whole confused scene there looms—I am choosing my words carefully—the dark shadow of the Aberfan traeedy which, the House will recall, engulfed a small community because no one in authority ever considered it to be his duty to calculate the total risk involved. That is the answer. I am sorry to say Mr. Speaker, to your earlier question, for it is also a long story and I hone that hon. Members will be patient with me as I recount the details.

Mr. Roger Moate: I am sorry to delay my hon. Friend but I wonder whether he could enlighten me on one point. It was put to him earlier that all these matters could be dealt with by the petition procedure which would apply if the Bill reaches the House of Lords. Can he explain why that is not

a satisfactory procedure with which to deal with the matter he is raising?

Sir B. Braine: That is a good point. It was suggested earlier that if I were reasonable, that would be a course which I should allow the House to pursue, and it might be argued that much of what I am to say could be dealt with in another place. I agree that in normal circumstances, with a normal Private Bill, having made one's protest here—as I have done on Second Reading and again at Report stage—the Bill should be allowed to pass, since it is open to local authorities. or for that matter other objectors, to petition their Lordships' House. But the circumstances are not normal; the Bill is not a normal Private Bill.
The provision in the Bill to which I object touches not upon some narrow interest affecting only a few people or injuring possibly the interests of a small corporation, or a few individuals. It touches upon the safety, health and peace of mind of a whole community which is represented in this House, but not in the other place. If, as I shall presently show. Ministers have behaved towards that community in a neglectful and damaging way, and if now nationalised industry shows the same disregard for that community's interests, feelings and susceptibilities by insisting on the retention of the objectionable parts of the Bill, then it is in this House that the facts must be laid bare for all to see and judge.
I am proud to have represented the people of South-East Essex for nearly a quarter of a century. I should feel that T was failing in one of my first duties to them if I did not pursue the matter on their behalf with all the means at my disposal. When an issue of this kind arises and a community has exhausted every other means of reasonable and constitutional protest available to it, it rightly looks to its Member of Parliament to carry on the struggle in this House. I will not be denied that privilege. Indeed is this not a matter which goes to the heart of what Parliament is all about? Ts it not one of our oldest constitutional principles that redress of grievance should precede supply? Ministers may govern in the name of Her Majesty, but only on the understanding that they first redress the grievances of Her Majesty's subjects. T assert that this principal covers Private Bills as well as public Bills.
No one, not even the British Railways Board, has the right to inflict a hazard upon my constituents without protest in this House. My hon. Friend the Member for Faversham (Mr. Moate) asked a pertinent question. There is another reason why the circumstances are not normal. The hon. Member for Islington, South and Finsbury gave us the answer. He said that unless we pass this Bill tonight and it goes to another House and is rushed through and becomes law by the end of the month, the most dreadful consequences would follow.
What follows from that argument? Apart from anything else, it seems unlikely that there will be time to deal with the matter adequately in another place. We have the word of the hon. Member for that. I rather gather that the promoters would wish to have the Bill straight away, without any more fuss and bother. They would be very unhappy to see it carried over into another Session or even, who can tell, into another Parliament.
Then there was this nonsense of suggesting that the local authority could petition in another place. If I am not mistaken, the promoters—and the hon. Gentleman made this clear—would seek in these circumstances to get the Bill rushed through in another place and, although it would be wrong for me to presume to say how their Lordships might deal with it, any such rush and lack of consideration would be contrary to the best interests of the people I represent and would be bitterly resented by the local authority.

Mr. George Cunningham: I must make one fact plain. There is no intention or desire or possibility of the other place disposing of this Bill before the Recess, whatever happens here tonight. Nor is that necessary for the retention of the policing powers. I could explain why if it were necessary, but I would take too long to do so in an intervention. Provided the Bill passes through this House tonight, the law is such that the policing powers are essentially preserved although the Bill does not pass through another place before next Wednesday.

Sir B. Braine: That is very unconvincing. The hon. Gentleman and British Railways Board have had a great deal of

time to ponder this. They have known of my objection for many months. They refer to it in the Statement accompanying the Bill. If it is so important for them to secure the Bill for these other reasons, it was always open to them to withdraw this objectionable provision. If that were not possible they could at least have indicated that when the Bill reached another place arrangements would be made to put the matter right. But no! The British Railways Board takes its cue from the arrogant attitude which has been characteristic of all who have had anything to do with this matter from the beginnng.
Let me begin by setting the scene. I must do this if hon. Members are to comprehend the full significance of the proposal in the Bill to which I object. Canvey Island, which I have the honour to represent, is an island comprising less than 4,000 acres. It is generally flat, and a large area is below sea-level. [Interruption.] I am talking of the one place m the Kingdom that was completely inundated by the East Coast floods in 1953 when we lost 100 souls. That was a matter of grave concern to us then and therefore when I refer to topography it is not a laughing matter. It has a significant place in the story. I hope hon. Gentlemen will understand that.
Much of Canvey Island is generally flat and below sea level, yet successive Governments and planning authorities have encouraged no fewer than 30,000 people to make their homes there. It is not an unpleasant place. In the summer months that number of residents is doubled by holidaymakers. At the height of summer there may be 50,000 to 60,000 people in a small island of less than 4,000 acres.
I said that I had represented the area for a long time. I therefore know it like the back of my hand. I still have vivid memories of the great flood disaster in 1953 when the islanders were the most hard hit of all the East Coast communities. We lost many lives, extensive damage was done and many of the inhabitants felt at the time that the island would never recover. For me, it was an unforgettable experience and it left in my mind an impression of vulnerability which lies at the root of what I shall say tonight.
Canvey survived that disaster. Behind greatly strengthened sea defences the island recovered, grew and prospered. Yet


it remains vulnerable in the sense that, although there are now two bridges linking it with the mainland instead of only one in 1953, the approach roads converge at a single roundabout. If ever disaster came again to Canvey, it still has only a slender communication link with the mainland. It does not take much imagination to see that that would create difficulties in an emergency should the fire and rescue services seek to get on to the island at the time when the inhabitants are trying to get off.
Canvey, however, is vulnerable in another sense. About half the island is residential. The other half is given over to extensive oil, gas and chemical storage installations, all of which are officially classified by the fire service as major fire risks, and also to the sites of the two new oil refineries, one of which is already under construction, which are to be served by the additional hazard represented in the powers sought by the British Railways Board in the Bill.
The introduction of these refineries into the already endangered environment close to a large and growing residential population has been forced upon us, despite continued and bitter opposition from the residents, the local district councils most closely concerned and myself. I will come to these new haxards in due course. For the moment I wish to concentrate on the existing hazards with which the islanders have had to live for many years.
There are three main installations on the island, all next door to one another and to the sites where the refineries will he erected. First, there is the important North Thames methane terminal which, I have heard said, stores enough gas for one week's consumption for the whole country. Here there is storage for about 110,000 tons of frozen gas below ground level and a variety of other products such as ethylene, pentane and liquefied petrol gas. Altogether there are 24·6 million gallons of inflammable material stored in that one installation.
Next door are the Texaco oil tanks holding 5·7 million gallons of class A highly inflammable products and 7·7 million gallons of class B products which are only slightly less inflammable.
Then, we have the London and Coastal Oil Wharves Ltd. which is licensed to store 61·2 million gallons of chemicals—

50·5 million gallons of class A products and 10·7 million gallons of class B products. These include 1,280 tons of cyclo-hexane, the material which was used in the manufacturing process at the Nypro plant at Flixborough. Let me say in passing, however, when this fact became known after the Flixborough disaster, a spokesman for the company announced, no doubt in an honest endeavour to allay anxieties, that this was by no means the most dangerous chemical stored in the installation.
London and Coastal Oil Wharves has a jetty which can handle tankers of up to 45,000 tons. Storage is rented to customers, which include the major oil companies. Some 650,000 tons of products were handled there in 1970 and this increased to 750,000 tons in 1971. I do not know the present figure, but it is unlikely to be less.
At any one time on the island, a total of 100 million gallons of highly inflammable and dangerous material is stored there and much of this is also transported through an area where many thousands of my constituents have their homes.
As I told the House on the Report stage of the Health and Safety at Work Bill on 18th June, there are 33 residential caravans immediately adjacent to London and Coastal Oil Wharves. There are other dwellings between 140 and 220 yards away, the famous "Lobster Pot" public house—beloved of that distinguished ex-Member of the House, the late Sir Alan Herbert—is about 150 yards away, while the main residential areas where 30,000 people live start at about 550 yards away.
Nor is this all. For, immediately to the west of Canvey, in Thurrock, are two of the largest oil refineries in the country—the Mobil refinery at Coryton and the Shell refinery at Shellhaven. Both of these have expanded their operations considerably in recent years. Both are within sight and smell of Canvey. There is also a third large refinery across the river in the Isle of Grain.
I wish to emphasise two points. The first is that these three refineries already exist and are not to be confused with the two new refineries which are to be built at Canvey, while yet another is planned opposite us on the Kent side of


the river at Cliffe. Secondly, the prevailing winds in the area for a large part of the year are south-westerly so that the emanations from the existing refineries and other industrial plant in Thurrock drift over the heavily-populated areas of South-East Essex and Southend. As for Canvey itself, it should be readily seen that its residential population is already hemmed in on the south-west and west by a heavy concentration of hazardous installations—hazardous in themselves, and made vastly more so by being adjacent to one another.
Thus, we have here a web of risk made up of many strands—the installations themselves, the trans-shipment of hazardous products from the river to land, and by road tanker, and the possibility of collisions in the river itself. The House will be interested to know that there have already been many accidents, many warnings and many narrow escapes.
The Robens Committee on Health and Safety at Work specifically mentioned in its report that its attention had been drawn to a number of locations
where highly explosive or flammable substances are kept in such quantities that any failure of control—however remote the possibility—could create situations of disaster-potential.
The report went on to describe how situations of considerable potential risk to the public could be created in a variety of ways and circumstances. I quote from paragraph 297:
The problem can be particularly acute in sites or areas where there is a gradual accretion of potentially hazardous development by different employers. Existing technical problems may be compounded by new and possibly incompatible developments nearby, and administrative arrangements can become complicated because of the number of authorities that might become involved in one way or another. In such situations industrialists and officials no doubt apply their knowledge and discharge their responsibilities to the best of their abilities. Nevertheless, there have been expressions of public concern from time to time about the possibility that official controls may be inadequate or inadequately coordinated.
I draw the attention of the hon. Member for Islington, South and Finsbury in particular to the fact that the report goes on to give as an example of this public concern the Adjournment debate on fire safety in Canvey Island which I initiated on 24th November 1970 and also

a report on an explosion at South Stifford, in our neighbouring district of Thurrock.
This then is the area of risk and concern in which successive Governments have authorised the introduction of two new oil refineries with their attendant storage and transportation facilities. This is the area of risk and concern in which the British Railways Board seeks powers to bring an additional hazard. That it has done so against the wishes of the local people and their elected representatives is bad enough, but to have done so in the knowledge that we already have too great a concentration of hazards for health or safety is irresponsible and unforgiveable. Such action is to compound the chances of something going wildly wrong. It is not to be wondered at that in the south-east of Essex the Department of the Environment is regarded as a sick joke.
I emphasise that this is the area of risk and concern into which British Railways, if given the powers contained in this Bill, would bring an additional hazard, since to move oil products by rail is infinitely more hazardous than to move them by pipeline.
Up to about 20 years ago, it could be fairly claimed that South-East Essex enjoyed the reputation of having such pure air and bracing conditions that large numbers of people suffering from chest complaints and possessed of only limited resources made their homes there on medical advice. I know that there are hon. Members who have relatives who came there for their health. I have met many constituents who have told me that coming to Canvey gave them a new lease of life.
The atmosphere changed as the oil refineries in neighbouring Thurrock expanded their operations. In 1957, constituents started to complain to me. In the first nine months of that year, when a special record was kept by an efficient public health inspector obnoxious fumes were detected on no fewer than 39 days—

Mr. Deputy Speaker (Mr. George Thomas): Order. Everyone wants to be fair to the hon. Gentleman, who is making his constituency case. But he will have to link it a little more closely to the current proposals in the Bill.

Sir B. Braine: It is not difficult to relate it to the current proposals. If I might spell out what I said before you took the Chair, Mr. Deputy Speaker, you will then see exactly what I am proposing to do, and I trust that you will feel that that is entirely in line with what the House expects on an occasion of this kind. In short, the Bill by itself seeks to bring a relatively small hazard to Canvey Island, which is in my constituency, to serve what I shall presently show, is a considerably larger hazard—in fact, two hazards. These two additional hazards have to be viewed against the background of existing hazards which have given rise to grave concern in my constituency.
I am sure that hon. Members on both sides of the House, when they have heard the facts, will grasp the gravity of what I am trying to tell the House. It is necessary, therefore, to show not only how these hazards have been built up stage by stage with the knowledge of the authorities, but also that their totality has never been appreciated and measured. It is this which I wish to bring to the attention of the House tonight as a reason for refusing to give the Bill a Third Reading.
As long ago as 1958 my constituents, including many invalids, were petitioning against these nuisances. They urged that the nuisances from the existing refineries were distressing in the extreme and were aggravating their conditions. Indeed, I raised the matter in the House.
It must be remembered that while we are concerned here about serving new refineries with a railway line on Canvey itself, the existing refineries are in neighbouring Thurrock, not far away, and within sight and smell of my constituency. I want to be absolutely fair about these installations. The oil companies were worried about the matter. It emerged that the trouble was due to occasional accidents in the refineries rather than to any general daily emissions. The Deputy Chief Alkali Inspector, at a meeting of Essex local authorities on 5th June 1958, said
that all known methods were being adopted to eliminate the smells but when they occurred it was probably due to accidents in the, refineries.

Mr. Deputy Speaker: Order. The hon. Gentleman must also be fair to the House. He has drawn our attention to the long

history of this matter. I suggest that he ought now to say why the terms of the Bill, which can hardly have anything to do with the smell in 1958, are relevant to the history.

Sir B. Braine: If you will be patient with me, Mr. Deputy Speaker, you will see how the matter is related to the Bill. We were quoting Edmund Burke a little earlier. Did he not also say that small dangers, by being despised, grow great? Therefore, my purpose, starting at the beginning, is to show how, by and large, the ignoring of small nuisances and small hazards, has now created a situation of the utmost gravity. With respect, I feel that the case must be argued at some length to demonstrate the sheer gravity of the situation now facing my constituents, I am prepared to telescope my remarks, but my constituents would expect me to deploy their case before the House tonight. I submit, therefore, that it is in order for me to put it forward for the reasons which I have given.
The truth of the matter is that by the early 1960s my constituents had learned to live with these smaller nuisances—

Mr. Deputy Speaker: Order. I know that the hon. Gentleman will not want to be at cross-purposes with the Chair, any more than I want to be at cross-purposes with him. But we must somehow get to this railway and the proposals in the Bill. On Third Reading, the House is discussing directly what is in the Bill.

Sir B. Braine: What my constituents did not foresee in the 1960s was that, having got used to the nuisances then existing, their problems would be compounded by deliberate decisions to introduce new refineries. It is those new refineries which are to be served by the provisions of the Bill.
I should like to demonstrate the risks attendant upon the powers given in the Bill. You know yourself, Sir, from the tragedies in the mines of South Wales, or in disasters which can happen anywhere, that one accident can lead to another, triggering off a whole series of consequences. What I hope to be able to describe is how situation after situation has triggered off a series of events which have placed my constituents in peril. The powers sought in the Bill represent just one more hazard.

Mr. George Cunningham: On a point of order. I wonder whether I could draw to your attention, Mr. Deputy Speaker, the fact that the hon. Member for Essex, South-East (Sir B. Braine) has given notice, not just to the House but to the whole country, of what he is doing tonight. It was reported on the news tapes that he hopes tonight to make
… the longest speech of this Parliament so far from theback benches".
The report added:
Sir Bernard admitted today that there was no certainty that he would get away with these tactics.
Would you agree, Mr. Deputy Speaker, that it is highly desirable that he should not get away with these tactics, because to do so would be an abuse of the House?

Mr. Deputy Speaker: We get bad news from time to time. The hon. Member must leave it to me, as long as I am in the Chair, to try to ensure fair play. I want to ensure fair play for the hon. Member for Essex, South-East (Sir B. Braine), but I have to observe the rules of the House. A Third Reading, as the hon. Gentleman knows, is limited to a discussion of what is in the Bill. There was an extensive debate of these matters on Second Reading, when many of these arguments were put before the House.

Sir B. Braine: rose—

Mr. Cyril Smith: On a further point of order. Is it not proper that a matter of this gravity should be debated in this House, rather than in another place, for the reason that the hon. Member for Essex, South-East (Sir B. Braine) gave earlier—that at least his constituency is represented in this House and not in another place? Could notice be taken of the fact that many of us who have an open mind on the Bill take great exception to an hon. Member opposite suggesting, first, that the discussion in this House should be stifled, and, second, that it should be transferred to another place?

Mr. Deputy Speaker: As long as I am here, or Mr. Speaker or the Deputy Chairman of Ways and Means is here, free discussion will not be stifled. But we always encourage orderly discussion.

Mr. Bob Cryer: Further to the point of order. Is it in order for

hon. Members who are making their first appearance in the debates on the Bill to complain about the amount of discussion that it has had especially when we know that they are political Cinderellas who will disappear at midnight?

Sir B. Braine: It grieves me very much that when I am attempting to do my duty to my constituents by describing a situation which causes them the gravest concern, these small and trivial points should be made.
I hope, Mr. Deputy Speaker, that you will allow me to show, step by step, how the environment of my Canvey Island constituents has been steadily worsening and will be worsened still further by the proposals in this Bill. In order to show how half a mile of railway line and some sidings, by themselves not very important, are in fact of the utmost importance in this context, I must be allowed to show the extent of existing hazards.
It is a story which, as I told Mr. Speaker at the beginning of my remarks, is bitter and long, and it must be told. It will be told—I bow always to your rulings, Mr. Deputy Speaker—within the terms of this Bill in the sense that the provision in Clause 6 is an additional hazard to an already endangered environment.
In the summer of 1964 it was revealed in the national Press that United Refineries Ltd., a subsidiary of an Italian State-controlled group of oil companies, proposed to build a f15 million refinery on the island. The company had obtained an IDC and, subject to the granting of planning permission, the refinery was expected to be completed in 1967.
When the exchanges took place a moment ago I was attempting to explain how my constituents had suffered over the years from intermittent smell nuisance from the three existing refineries in the Thames Estuary. It was known and reluctantly accepted that an offensive odour was inseparable from the oil-refining process, and in some cases where people were suffering from chest and throat complaints, considerable annoyance and even distress had been caused. It was hardly surprising, therefore, that with this new development there should be widespread anxiety, not only to my constituents but to people living on the


Kent side of the river and further afield, in South-East Essex and Southend. Over 20,000 people signed a petition against the proposal.
Existing refineries in Thurrock, while visible, were at least some distance from the residential population in the island and in neighbouring Benfleet to the north, the combined population of which at that time totalled 50,000. But the site proposed for the new refinery was on low-lying ground on Canvey, about 580 yards from Benfleet railway station. The residential area of Benfleet occupies high ground which rises from the railway line to the north, up to a level of 250 feet. Since this was the height of the proposed chimney to the refinery, and since the prevailing winds in the summer months are south-westerly blowing across the island towards the mainland, it should have been apparent that this proposal would make life unbearable for thousands of my constituents.
While the height of the chimney and the volume of noxious fumes emitted would depend on the kind of fuel gas or fuel oil burned, there was bound to be an emission into the atmosphere of sulphur dioxide and other pollutants. Thus, with the chimney at 250 feet, my constituents would be exposed, for varying periods to varying quantities of pollutants, breathed in at almost ground level. This would make complete nonsense of all the principles of good planning. It was bound to arouse intense opposition from the people who had made their homes there, and it did.
I found that the Board of Trade were reluctant to issue an IDC, but that they were told by United Refineries that if the company could not build at Canvey, the refinery would not be built in this country at all. Hon. Members will therefore begin to see the gravity of what I suggest—that undue pressures were beginning to be brought to bear by foreign oil companies.
In my innocence at the time I felt that all was not lost. There simply had to be safeguards in our planning law. So I decided to raise the matter in Parliament in the hope that I could alert those responsible for planning matters to this monstrous proposal. I was in some difficulty because the Canvey Island Urban District Council at that time was Labour-controlled and was actually advocating the

establishment of an oil refinery on the island. The electors later threw these gentlemen out, but unhappily they were there long enough to open the door and their views undoubtedly influenced much of what followed.
It should be put on record that when United Refineries saw that its proposal was arousing intense local opposition it sought to overcome it by inviting local councillors to visit refineries in Italy, at the company's expense, to see for themselves how unfounded were the anxieties of the objectors and how marvellously their refineries were operated and merged into the landscape with no one noticing them.
Such a visit took place. On their return home, some of the councillors were ecstatic about the way in which their generous hosts ran their installations. Never once did it occur to them that if they wanted to know how refineries cope with atmospheric pollution, it would have been better to study the problem under the atmospheric conditions in Britain rather than under the totally different conditions prevailing in Southern Europe. Had they grasped that point, they need not have travelled to the Mediterranean but could have gone to Thurrock, next door.
All this was long ago. I understand your anxiety, Mr. Deputy Speaker, that I should not dwell too much on the past. Today no doubt those councillors are sadder and wiser men. I do not impugn their motives. I think that they genuinely believed that a refinery would add substantially to the rateable value of the district. I mention this unhappy episode now only to show how slender our defences were against a foreign oil company's successful threat to the Government to take its business elsewhere if it were refused permission to build in Britain, and to show how it extended expensive hospitality to people whom it thought might influence the climate of opinion.
I raised the whole matter in the House in December 1964 and drew attention to what I considered to be an improper action of the company. I was reinforced in my action by the decision of the Essex County Council, as planning authority, to refuse planning permission. The Minister who replied to the debate—the right hon. Member for Bermondsey (Mr. Mellish), now the Government Chief


Whip—conceded that the Board of Trade had indeed hesitated before granting an IDC. He pointed out that it was only a little refinery with a throughput of only 2 million tons, and that any further expansion would have to go to a development area. He explained that as planning permission had been refused, any appeal by the company would be considered by the Minister. There would be a public inquiry and objections would be heard.
Let me say at this juncture that there were to be numerous inquiries at which objections were to be heard, and that the Minister's inspectors would listen courteously and gravely make recommendations which in almost every case were to be brushed aside. That is one of the most astonishing features of this story. However, all that lay in the future, and for a moment I felt that the message had got through. We all know how genial the right hon. Member for Bermondsey can be, and I felt that he had got the message. He gave me a careful and courteous reply. He went so far as to say that he thought that I had done my duty to my constituents and had done it very well.
Perhaps I might be forgiven for thinking at that time that attention would be paid to my representations. Certainly the strength of the case against this ill-judged proposal was self-evident. The planning authority had thrown it out, and public feeling was running high. Surely it could not prevail.
A public inquiry was held. The objections were raised. The Minister's inspector conducting the inquiry recommended that planning permission should be refused. Yet in March 1965 the Minister of Housing and Local Government—the late right hon. Member for Coventry, East, Mr. Crossman—ignored the recommendations of the inspector and granted planning permission.
From that moment the pass was sold—although we were not aware of it at the time. In fact United Refineries did not go ahead with the building of its refinery. One reason for that was that the company's investment programme was influenced—believe it or not—by the current Italian Economic Development Plan.

Mr. Deputy Speaker: Order. Is this interesting part of the hon. Member's speech concerned with the current proposed refineries?

Sir B. Braine: Yes, indeed, Mr. Deputy Speaker, because the company to which I am referring disappeared from the scene for only a brief period. It returned subsequently, but in the meantime fresh foreign oil companies were moving in. Canvey was becoming besieged by these interests.
Another factor in United Refineries' reluctance to proceed was that the trend was moving towards the building of very large refineries, and no doubt it was felt that a 2 million ton throughput would be uneconomic. So much for the facile argument of the Board of Trade in 1964 that it was in the British national interest that the company should be allowed to build at Canvey because otherwise it would go elsewhere.
Not unnaturally, my constituents and I thought that in these new circumstances this unwanted project might be abandoned and that we should be left in peace. Our relief was short lived. In February 1970 we learned that United Refineries and an American oil company, Occidental, had applied for IDCs to build refineries on adjacent sites. My constituents and I were horrified. The two companies opened negotiations for a joint venture, but they were unable to agree, and the negotiations collapsed.
Occidental's application was referred to the Secretary of State for the Environment, who ordered the usual public inquiry to be held. Objections on grounds of pollution, health, amenity and traffic considerations, risks of fire and explosion and navigational aspects were heard in the last weeks of 1970. The decision was delayed because in the meantime United Refineries decided to make a planning application in respect of a new site.
For a brief moment a third foreign oil company flitted across the scene. This was the Murphy Oil Corporation. It had just been refused permission for a refinery in the Glasgow area. It therefore cast its eyes on Canvey, which, as I have shown, had been sold out by the previous Government, and sought a partnership with United Refineries. In November


1970 the two companies signed a contract for a joint venture.
These applications were strongly opposed by the local district council which, under Conservative leadership, was taking a more robust line. They were also opposed by the Essex County Council and by me. I am not making any party point because the local Labour Party later changed its mind under the pressure of events. My stand on this has been against sucessive Governments of all parties. Our reasons for opposing the applications were—and here we come to the nub of the matter—the proximity of the proposed development to residential areas, the adverse effect on local amenity, and intrusion into the green belt.
The Secretary of State ordered a public inquiry, and this took place in March and April 1971. The inspector who conducted that inquiry reported to my right hon. Friend that there was a strong economic case for the refineries, that there were no insuperable objections on the grounds of pollution, traffic or navigational aspects, areas, the adverse effect on local amenity, but that it would be a serious environment of a refinery on either side. Accordingly he recommended refusal of the proposed development.
On 23rd November 1971 the Secretary of State announced his decision. He granted permission to Occidental to build a refinery with a 6 million ton throughput and a jetty. He refused the application from United Refineries, the principal reason given being the effect the development would have on the physical environment. He declared his belief that it was important to maintain a significant area of open land between the Occidental Refinery and Benfleet, but he rejected his inspector's recommendation to be more specific about the limits to be imposed on industrial development in the area.
No doubt the Secretary of State and his advisers, miles away from the sight and smell of oil refineries and none of whom, I would wager, had ever been anywhere near the scene, felt that rough justice had been done. One oil company had been given what it wanted; the other was sent away empty handed. One part of the island was to be given over to an oil refinery, but elsewhere green belt was to be preserved. Surely these pestiferous islanders and their persistent Member of

Parliament would now settle for one refinery.

Mr. Stephen Ross: Having visited Canvey Island recently, I agree that the area of green belt land left would be very limited, and that the Minister's decision is seen to be absolute nonsense when one looks at the site.

Sir B. Braine: Yes, indeed, Anyone who has taken the trouble to see for himself comes to exactly the opposite conclusion to that reached on so many occasions in Whitehall.
Until 1970 local objections to oil refinery development had been based much more on fear of pollution, loss of amenity and visual intrusion than on safety from fire and explosion. This was not surprising, because the residents could smell the existing refineries but were not conscious that they posed any threat to their safety. But now that a refinery was to be built on the island, people began to recall that there had been a number of serious warnings of what might happen, especially as there were hazardous installations on the island and vessels carrying hazardous cargoes were passing it daily.
In fact—and now perhaps a few of the smiles might be wiped off the faces of those who have thought this an amusing occasion so far—in the three years up to 1970 the Essex Fire Brigade had responded to 54 alarm calls from the existing high fire risk installations in the area, of which no fewer than 45 were to the two oil refineries in Thurrock.
On 9th June 1970 there had been a serious fire at the Shell refinery following an explosion in a pumphouse. More than 200 firemen fought valiantly through the night as flames leaping 150 feet menaced some 25,000 tons of oil. Three men were badly burned and were taken to hospital. It was announced that the Shell Company would make a report, but that this would not be published.
May I give the House some idea of the lax way in which matters of this kind were handled at that time. This has relevance to the addition of two further refineries and their attendant rail communications.

Mr. Deputy Speaker: It has relevance only in passing, if the hon. Gentleman is making the point that adequate precautions are not taken, but to give the full


details of how other fires were dealt with can hardly be relevant.

Sir B. Braine: All the fires we have had in South-East Essex thus far have been handled with great skill and heroism by the hard-pressed and under-manned Essex Fire Brigade. If the hazards are added to—and one of the proposals in the Bill is that there shall be an additional hazard introduced to Canvey Island—there may come a day when a fire may not be handled quite so successfully. There may come a day when such a fire triggers off an even more serious incident. If I am allowed to pursue the argument, I shall give the House evidence which will suggest that this is not a remote possibility, however much we might wish it to be so.
Accordingly after the Shell refinery fire I wrote to my right hon. and learned Friend the Member for Hexham (Mr. Rippon), then Minister of Technology, who was later to play a melancholy rôle in this saga of muddled thinking, wrong decisions and wilful refusal to face the facts. I drew my right hon. and learned Friend's attention to the fact that the Shell report would not be published and that many of my constituents living next door to a massive concentration of oil storage were not only worried by the implications but wanted to know what the lessons were.
I told my right hon. and learned Friend that Canvey was doubly vulnerable—it was vulnerable because of its own complex of fire hazards and was vulnerable because if anything went wrong it was dependent upon a single life-line of communication to the mainland. I asked him whether he was really satisfied that there were no lessons to be learned which should be published.
The reply was that although the report would not be made public copies would he sent to the Thurrock Urban District Council's petroleum officer—Thurrock was the neighbouring district in which the refinery was situated—to HM Inspector of Factories and Essex Fire Brigade, and that HM Inspector of Explosives would keep very much in mind the need to pass on useful information to the petroleum officer of Canvey Island.
No doubt that was intended to be helpful and reassuring, except that nothing happened. That was why on 24th Novem-

ber I raised the matter on the Adjournment. In the five months that had elapsed since my right hon. and learned Friend's assurance, no information had been passed to the Canvey Petroleum Officer, This was not just an oversight because the clerk of the urban district council, who was also the secretary of the Thames-side Oil Refinery sub-committee, had written on his own account to the Inspector of Explosives as he too had heard nothing, having been assured independently that he would be told what lessons had been learned. After it was known that I would be raising the matter on the Adjournment there was a rushing to and fro in Whitehall and a promise was made that Canvey would be given the information.
Events were beginning to snowball. In the Adjournment debate I told the House that while I was waiting for the report on the earlier fire at the Shell refinery local newspapers had reported on 11th November that another fire had broken out at that installation. These. hon. Members will realise, are fires taking place within the sight of my constituents who have been promised two additional refineries. If I must relate the matter to the Bill, these two refineries would be served by the rail link which the Bill would empower.
Nor were these happenings at the Shell refinery the sole reason for the mounting tide of anxiety. On the night of 26th July the Thames was literally set on fire. A 10,000 ton passenger ship, the "Monte Ulia", bound for Tilbury, veered off course and ploughed into the oil jetty at Coryton. It severed the oil pipe line. Hundreds of tons of crude oil gushed into the Thames and the river was set on fire. The noise of the impact was heard a mile away. The ship swung round and grounded on a sand bank off Canvey, setting off a terrifying chain reaction as the blazing oil snaked round Canvey Island. Fire tugs happened to be on the spot and they battled to stop the flames from spreading. Two blazing barges moored to the Mobil jetty broke loose and were swept down on the ebb tide towards the London and Coastal wharf on Canvey island where a tanker was unloading hundreds of tons of highly inflammable fuel. A general alarm was sounded. Shipping in the estuary was halted. Thanks to the splendid exertions


of the Essex Fire Brigade, the fire was eventually brought under control.
We had had the narrowest of escapes. Had the fire tugs not been providentially on the scene and had the wind and tide directions not been favourable it is almost certain that there would have been a major disaster. A spokesman for the Port of London Authority, which is responsible for safety on the river, was reported in the local Press as saying:
We have been very lucky. There has been nothing like this since the war. It went off like a bomb. There was a terrible risk with so much fuel around.
One experienced pilot whose job was to bring ships into the estuary told the local Press on 31st July 1970:
The 'Monte Ulia' incident was a warning. It showed on a comparatively small scale the kind of incident the Thames is facing. It involved just 500 tons of oil yet there are 20,000 ton tankers going up there.
The pilot in question warned about navigational dangers, the narrowness of the channel, and the fact that jetties handling crude oil, methane gas and other dangerous substances were jutting out too close to the deep-water channel. He said:
The jetties are so close to the channel that they represent a hazard to navigation.
One shudders to think what would have happened if the accident had involved not a passenger liner but an oil tanker or a methane carrier. Yet such vessels pass Canvey Island and its hazardous installations every day.
On the day after the "Monte Ulia" incident, I wrote to the then President of the Board of Trade and told him what had happened. I asked whether a routine inquiry under the Merchant Shipping Acts had been put in train and whether there were any lessons to be learned. I asked him to appreciate that on Canvey Island because of our vulnerability we were sensitive to matters of this kind.
I drew the then President's attention to the proposal to erect a new oil refinery—I ask the House to remember that at this stage no decision had been taken in that regard—and I pointed out that this would increase the oil traffic off our shores and therefore the volume of hazard to which my constituents would be exposed. I did not know then what I know now—that there would be a huge increase in that traffic as a result of decisions which still lay in the future, but

I shall come to that and its implications in due course.
On 7th August 1970 I was told that a preliminary inquiry had been ordered and was proceeding. From that moment until I raised the matter on the Adjournment in November, I heard nothing. That treatment has been characteristic of what has been happening on Canvey Island and to its elected representatives over a long period of time, and under successive Governments.
What was the lesson to be learned from that experience? It was that nobody in authority thought it right to keep an hon. Member representing an anxious community in the picture. Nobody thought that it was his responsibility to consult others—to see the problem in the round. Shipping hazards were left to the Port of London Authority; fire problems were a matter for the Home Office; planning was a matter for the Ministry of Housing, and later the Department of the Environment, and in any event the decision where oil refineries were concerned seemed to be cut and dried in advance. If planning authorities or even the Department's own inspectors got in the way they would be brushed aside.
In that Adjournment debate I dwelt on these problems. I asked a number of questions, two of which were of particular relevance to all that followed, to all that I am saying here tonight, and to the objectionable proposal in the Bill. The first question was whether the Home Office—the Department primarily concerned with preventing disasters occurring—would ensure that other Departments bestirred themselves in situations of this kind involving safety.
Here I was touching on the need—later I shall spell it out in greater detail—for some co-ordinating authority to look at the totality of the effect of all that was happening to the environment of South-East Essex in general, and Canvey Island in particular.
The second question was to ask the Home Office to draw the attention of the then Secretary of State for the Environment, my right hon. Friend the Member for Worcester (Mr. Walker) to the dangers, indeed the folly, of permitting an additional oil refinery to be established in an area where there were already far too many fire hazards for the health


and safety of a large and growing residential population. I added these words:
I have no wish to be alarmist. Indeed. I am choosing my words carefully. But the Aberfan disaster crept upon us largely unawares precisely because no one ever thought that it was his responsibility to calculate the risks being taken. I beg my hon. Friend to make sure that his colleagues understand fully that, before any deliberate decision is taken to add to the existing fire hazards on Canvey Island, they must remind themselves that the safety of more than 25,000 human beings is involved.—[OFFICIAL REPORT, 24th November 1970; Vol. 807, c. 378.]
Since then, of course, the population of 25,000 has increased to 30,000 and the total hazard has been greatly increased by the expansion of storage facilities for inflammable products. Potentially it has been increased still further by the decision to authorise two new refineries and facilities for handling tankers carrying crude oil.
It is against that background that the House has to consider the powers to introduce yet another hazard in the form of a rail depot to handle oil products on Canvey Island. However, in 1970 that lay in the future. In the following year all was quiet except that we had the customary fires at the two existing refineries. We were expecting such fires annually and it seemed that we had to live with them. These fires served, however, as reminders that refineries were hazardous installations where, with the best will in the world, accidents would sometimes happen.
May I say in passing that today I had the privilege of presenting to the safety officer at the Mobil refinery a diploma awarded by the British Safety Council. The diploma was presented here, in the Palace of Westminster. I paid rightful tribute to the work of safety officers in these installations. But I think that everyone will concede that, however well a refinery is run, accidents do happen. It is a marvellous tribute to the staff, particularly the safety officers, that in the vast majority of cases such accidents are quickly brought under control.
Nevertheless, there was a serious fire at the Shell refinery on 29th July 1971 and another at the Mobil refinery on 9th December. Thus we entered 1972 uneasily, but with only one new refinery authorised for Canvey Island. At that

stage one might have been forgiven for thinking that a belated lesson had been learnt, that a line had at last been drawn, and that we were to suffer no further assault. But that was not to be. In April 1972 United Refineries made a joint application with the Murphy Oil Corporation on similar lines to earlier proposals. To be fair to the oil companies, they had been invited by the then Secretary of State to put in this fresh application for an alternative site in the hope, one can only suppose, that it would be an improvement on the earlier proposals.

Mr. Cryer: Will the hon. Gentleman accept, and make clear, that the Bill has nothing to do with planning consent for the refinery? I appreciate that he is concerned with the risk of transporting refinery products from point A to point B, but the Bill does not express or imply any planning consent, because that has been given. I agree that it is probably unfortunate. But does not the hon. Gentleman agree that, with planning consent having been given, the argument is about the form of transport to be used from the refinery?

Sir B. Braine: That is not the argument, although the hon. Gentleman's point is perfectly valid. The hon. Member for Islington, South and Finsbury who opened the debate considered that the Bill has nothing to do with planning proposals as such. That is true, but it is the contention of the residents and of their elected representatives on the local authority—this is the unanimous view of all parties on the local authority—that it is in any case wrong to transport by rail a product from the new refineries on Canvey Island, should they be built. The proper form of transporting the product off the island is by pipeline.
In any event I shall at a later stage in my speech explain, as the hon. Gentleman has not done, that one of the two refineries does not wish to use the proposed rail link. The rail link is, therefore, being provided for only one of the two proposed refineries, and it is not necessary. For that reason, I am surprised that the British Railways Board did not take the hint at a very much earlier stage and withdraw what is clearly to us an obnoxious proposal.
One reason for thinking that we would be left alone in 1972 was the unrestrained enthusiasm that the Department of the Environment was showing in preparing for the United Nations Conference on the Human Environment that was to be held in Stockholm in June of that year. Working parties were set up to prepare briefs for the British delegation, and hon. Members may remember some of them. They appeared as glossy publications for public consumption under such titles as "Nuisance or Nemesis", "Sinews for Survival" and "How do you want to live?".
The British view put to the conference carried a foreword by the then Prime Minister. He wrote:
A detailed and practical interest in the quality of life we lead in our island is central to the philosophy of this Government … We are conscious that alongside a desire for raising standards of living, there has grown up a worry that we might be destroying with one hand what we are creating with the other… that we might find we had only achieved rising material standards at the cost of producing a country about which, in terms of amenity, we were no longer enthusiastic.
Those were wise words from the former Prime Minister, now the Leader of the Opposition. They expressed impeccable sentiments, and were a warning to us all. Could it be that at long last someone would take
a detailed and practical interest in the quality of life
of Canvey Island? Could it be that someone would ask my constituents how they wanted to live, instead of always brushing aside their protests and snubbing their elected representatives?
On the strength of this, I tested the temperature of the water. On 5th July 1972 I asked the Secretary of State for the Environment
whether he will order an inquiry into the total effect on the local environment of the concentration of oil refiners and other industrial plant, existing and planned, in the Thames estuary?".
My right hon. Friend assured me that when proposals for new development of this sort came before the local planning authorities or were being considered by him the wider effects were taken into account.
That was a fair assurance, so I asked my right hon. Friend whether he was

aware of the concern in South-East Essex where so many people have made their homes, and more would be coming as a result of the decision to site the third London airport at the other end of my constituency,
about the deterioration of our environment by piecemeal development, with oil refinery after oil refinery being authorised? If my right hon. Friend means what he says about protecting the human environment, will he set up a planning inquiry commission to look into the totality of the threat to our environment? "—[OFFICIAL REPORT, 5th July 1972; Vol. 840, c. 522.]
My right hon. Friend replied that he did not consider that there was any evidence of a need for such an inquiry but he would carefully consider any future application in terms of the area as a whole and not in isolation.
We shall see as I develop my argument, how much that assurance was worth. By now our local authorities were disturbed about the way in which the situation was developing.
In July 1972 the Canvey Island Urban District Council pressed the Department of the Environment to set up a planning inquiry commission under Section 48 of the Town and Country Planning Act 1971. Such a commission of inquiry can be set up only where there are considerations of either national or regional importance which cannot properly be evaluated without a special inquiry or when the technical and the scientific aspects are of so unfamiliar a character that a proper determination cannot be reached under the ordinary public inquiry arrangements.
But a public inquiry planning commission can also be asked to look at alternative sites for the development and, subject to the Secretary of State's approval, carry out the necessary research. No doubt this request of mine was very embarrassing to those who had already decided that we would get a second refinery, whether we liked it or not. It took the Department two months to send me an answer. When it arrived all it said was:
as far as the present oil refinery proposals are concerned, it is not thought that these give rise to any consideration which cannot properly be evaluated at any ordinary local inquiry for which arrangements will shortly be made".
Towards the end of the year my right hon. Friend the Member for Worcester was succeeded by my right hon. and


learned Friend the Member for Hexham as Secretary of State. Inheriting this unhappy problem my right hon. and learned Friend could not have been left in any doubt, assuming that his advisers had briefed him, that there was intense opposition to the refinery proposal.
The promised inquiry was held in January 1973. The usual objections were heard at length and in the end the inspector recommended that the application be refused—[Interruption.] I hope that the hon. Member for Newcastle-under-Lyme (Mr. Golding) will stop gallivanting about the House and laughing at inappropriate moments. What we are dealing with here—and as the evening wears on this will become more and more apparent—is the safety of 30,000 human beings. The behaviour of the hon. Gentleman will, I have no doubt, be noted by supporters of his party in my constituency. This flippancy is typical—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. Could we not resume the debate? The hon. Member's comments are not altogether appropriate.

Sir B. Braine: When one is delivering a serious argument to be met with guffaws from hon. Members sitting on the Government Front Bench is not merely disconcerting, it is extremely discourteous, if not to me then to the occupant of the Chair.

Mr. Deputy Speaker: Order. The hon. Gentleman must get on with the very important speech he is making.

Sir B. Braine: I was saying that my right hon. and learned Friend inherited an unhappy problem. The promised inquiry was held and after the usual objections were heard the inspector recommended that the application should be refused, adding that in his view there was not enough suitable land left in Canvey for a second refinery.
On 28th March the Secretary of State announced that he rejected his inspector's recommendation and would give planning permission on the ground that the national economic interest should take precedence over the environmental disadvantages. I wrote to him straight away expressing my disgust and profund dissatisfaction. I did not then, and I do not now, accept that the national interest

required that these refineries should be added to the existing concentration of industrial high fire risks with which my constituents were being forced to live. I served notice on him that from that moment on I would view as worthless the protestations of concern for the environment made by successive Ministers on both sides. I will throw a veil over the correspondence that followed, utterly unconvincing as far as the Minister was concerned and with expressions of bitterness and betrayal on my side.
The feeling on Canvey Island was running very high. The Canvey Oil Refineries Resistance Group was busy mobilising opinion, and in April the chairman of the council wrote a moving letter to Her Majesty the Queen in which he said that the islanders had reached the "lowest depths of despair." That, for me, was a touching episode, reflecting as it did the feeling that there had to be some higher authority who could right a palpable injustice.
At the same time the council passed a resolution deploring the
decision of the Secretary of State for the Environment to allow yet another oil refinery to be constructed on Canvey Island, notwithstanding that his inspector recommended refusal of the planning application and regardless of the fact that the Essex County Council, Benfleet Urban District Council and Canvey Urban District Council and many of the local residents are opposed to any further increase in oil refinery or storage installations; demands that the approval be revoked and the national Government meet all costs incurred and calls upon the Government to change the legislation such that Parliament would reserve unto itself the decision as to whether an inspector's recommendation should be rejected on a major planning inquiry.
That was an interesting suggestion that has never been developed.
I wrote to my right hon. Friend to make sure that he saw the resolution, and I told him that it expressed in diplomatic language the intense anger of the Benfleet and Canvey Urban District Councils and the two communities over his decision. I told him that I had never known such bitterness about a planning decision, and that once again I felt obliged to ask him to revoke his decision. I added that it was my considered opinion that whatever trouble this might cause to the applicant company was completely outweighed by the blow which the decision had given to our confidence in democratic procedures. Our general view, I told my hon.


Friend, was that public inquiries which ended in a result of this kind were an expensive farce.
There remained, however, the wider question. If decisions of this kind could be made piecemeal without any regard for the total effect nothing could prevent the build-up of an even greater concentration of risk alongside residential population, which would quite simply invite disaster. That is why I oppose the Bill tonight. It represents one more hazard added to the rest.

Dr. Keith Hampson: Does my hon. Friend agree that a planning inquiry commission should look at the broad strategic aspects of development and planning? Why have Ministers in various Governments refused to accept the rôle of a planning inquiry commission? I suspect that a planning inquiry commission has never been held in this country.

Sir B. Braine: My hon. Friend has put his finger on a most interesting point. The function of the planning inquiry commission is to look at the wider implications With hindsight, everyone would say that the siting of airports, refineries, and so on should be looked at on a national basis.
I hesitate to express a view as to why successive Secretaries of State have resisted any suggestion that matters of this kind should be referred to a planning inquiry commission. In this context, I am dealing with the pressures which have been brought to bear by foreign oil companies upon successive British Governments. I have no evidence to suggest that Ministers have given way to foreign interests where they would not have given way to domestic interests, but unhappily the majority of the oil companies are foreign-owned. This remains a mystery. My hon. Friend's point serves only to illustrate the gravity of our situation.
It follows that if decisions of this kind could be made piecemeal without regard to the totality of the effect upon the environment, there was nothing which could prevent a situation from being built up which invited disaster. Moreover, unchecked this would induce the feeling in industry and Whitehall that the place to put high-risk installations was in areas where they already existed, irrespective of whether people lived there or not.
Indeed, some of us heard with horror the speech of my hon. Friend the Member

for Bedford (Mr. Skeet) a few weeks ago in putting the case for building a Burmah-Total oil refinery at Cliffe, only a short distance from Canvey Island. His argument was that the area was already heavily industrialised—and he was referring to North-East Kent and South-East Essex. He gave a catalogue of the industrial plant in the area. Not only would we have to put up with a refinery at Cliffe. He told us gratuitously that there was also a proposal to site a major power station next door to it.
My hon. Friend did not know, or if he did know did not say, that there had been agreement between Burmah-Total and the Central Electricity Generating Board about the construction of a nuclear power station in the Thames Estuary. I would be surprised if any local authority knew anything of that agreement.
But the worst piece of insensitivity was to follow. Canvey Urban District Council asked the then Secretary of State to receive a deputation. He refused. Under pressure from me, he changed his mind and in mid-June last year I led a representative deputation, consisting of councillors and local resistance groups. We put our case. We asked the Secretary of State formally to revoke planning permission. He refused.
We then asked him to consider setting up an independent inquiry, not a planning inquiry commission, which he had already rejected. We suggested that it should not be beyond his wit or imagination to set up an independent inquiry into the whole question of industrial development in the Thames Estuary with special reference to the proliferation of oil refineries. We argued that we already had too great a concentration of oil refineries in the area and too many industrial high fire risks on Canvey Island. We said that it was imperative in our view that the implications for future planning policy should be looked at afresh before further damage was done to the environment. We got no satisfactory answer. The feeling of bitterness, despair and frustration became all the more intense.
Let me at this stage draw together the threads of the argument. Despite an existing concentration of high fire risks, and despite intense local opposition, deliberate steps had been taken one after the other by both Labour and Conservative Governments to add to that concentration of risk.

Mr. Tony Newton: While my hon. Friend is tying the threads together, will he explain whether he is suggesting that these developments should not take place at all or that they should be spread across a wider area? If they are to take place, would not they be better placed together rather than spread the dangers across a wider area?

Sir B. Braine: My hon. Friend is on a point which I intend to develop later. It is necessary when objecting to development of this kind to make one's own position plain: is one objecting to the development as such, or is one saying that the development should not be here but somewhere else, perhaps even indicating where that somewhere else should be. That is a perfectly valid point, and I shall come to it later.
The Bill which we are considering gives a huge State monoply the power to add one more risk to those which already exist. It adds, so to speak, insult to insult and injury to injury. It may be argued that by itself the proposed rail link and rail depot for the handling of oil products is not a major fire risk. That has been the argument used all along to justify each new assault upon the environment of Canvey Island. I submit that this latest proposal cannot and must not be allowed to pass.
The steps over the years to worsen that environment were not taken in a fit of absence of mind but coldly and deliberately on the grounds that the national interest must take precedence over local amenity objections. It has always been the argument that the national interest must prevail over the amenity of the local inhabitants—not, it will be noted, the health and safety of my constituents, but their amenity.
That argument reveals considerable confusion of thought. If by "the national interest" was meant that Britain must have additional refining capacity, no one in South-East Essex would argue against such a proposition. It is manifestly in the oil companies' interests to build their refineries and to operate them close to the market where they hope to sell their products. No one can quarrel with that from a purely commercial point of view. It is also the case that the most lucrative and the fastest growing market for these products is in the already overcrowded South-East. The question is whether the

commercial interests of the oil companies should have precedence automatically over every other consideration. Should they be allowed to site their refineries where they want irrespective of other considerations, or should there be some strategic policy which would ensure that the companies were directed to go where they caused the minimum harm to the community?
To argue that it is in the national interest to build these new oil refineries in the Thames Estuary close to a residential population already living in an endangered environment is not only stupid and irresponsible but makes a complete nonsense of all that successive Governments have said for decades about the need for regional planning and for reversing the unhealthy drift to the South-East.
The point should have been grasped, especially by the Labour Government. They had an admirable opportunity on Report if they had bothered to listen to the argument and had agreed to my amendment which, incidentally, would have enabled the Bill to pass through rapidly and to avoid the dire consequences which would follow if it does not become law on 31st July.
I know that the Under-Secretary of State, who is most wise in these matters, would be the first to recognise that it is necessary to reverse the trend towards the South-East and that, if we are to have a healthy economy and social system, it is necessary to see that economic development is encouraged in the North and in Scotland. But there has been no sign from successive Governments that in regard to these—

Mr. Deputy Speaker (Mr. Oscar Murton): Order. The hon. Gentleman is going rather wide on Third Reading of the Bill. The main object and gravamen of his argument is the railway on Canvey Island. I think that it would be outside the competence of Third Reading to embark upon a general discussion on the siting of installations in other parts of the United Kingdom.

Mr. Tebbit: On a point of order, Mr. Deputy Speaker. I should find it difficult to follow my hon. Friend's argument over what, on the surface, appears to be a very narrow point about a small section of railway, which would appear to


be a trifling matter, unless I were to have the benefit of his complete case for the way in which these issues have arisen in the past.

Mr. Deputy Speaker: It is not quite such a trifling matter as the hon. Gentleman makes out because, on Third Reading, we are confined to what is in the Bill and to that alone.

Sir B. Braine: I am anxious to carry you with me, Mr. Deputy Speaker. I heed your advice, but I should like to make the same submission to you as I made to your predecessor in the Chair—namely, that the Bill provides for a rail link which because it is to handle oil traffic which by its nature is hazardous, is a hazard in itself. That rail link is designed to serve at least one new refinery, which is an even greater hazard. In order to establish that it is a greater hazard I must describe the accumulation of hazards with which my constituents have had to live for a very long time. These hazards range over a wide area. They are not limited solely to refineries, existing or projected. I am grateful to my hon. Friend the Member for Ching-ford (Mr. Tebbit) for his intervention, because he indicated exactly what I am trying to do.
I was on the point that the siting of these refineries was a contradiction of regional policy and made a nonsense of all that we had understood regional policy to be about.
After his decision to give planning permission to the second refinery on Canvey, I wrote to my right hon. and learned Friend the Member for Hexham on 5th April last year:
Your argument about the over-riding national interest is ludicrous when in fact the future development of the oil industry must to a very large extent lie along the North-East coast and even Scotland, close to the points of delivery from the North Sea fields. Nobody with any sense can think of the refineries of the future being isolated from the petrochemical industry and the growth which one expects to flow from complexes of this kind. There is, however, no possibility of developing a petrochemical industry in the Thames Estuary.
It is important in relation to the Bill to realise that the "national interest", which is really a camouflage term for the interests of the oil companies—and foreign oil companies to boot—is being allowed to prevail over the "amenities",

which is a camouflage term for the safety and health, of the local inhabitants. That puts the matter in a nutshell.
Before I turn to an interesting new political twist to this story, let me explain why there were and still are solid grounds for anxiety about the totality of risk to the island. It has always been the contention of the Department of the Environment that an oil refinery is inherently a safe installation because of the very strict regulations laid down by the licensing authorities, which are now the county councils, under the Petroleum Consolidation Act, 1928.
Those regulations cover fire and safety measures and premises are licensed annually, so there should be strict control, No one doubts that oil companies operate their refineries with care and a sense of responsibility. I have no criticism to offer on that score. The same arguments can be used about the other installations on Canvey Island. I am sure that those who run the methane plant and the London and Coastal oil wharves spare no effort to ensure that safety precautions are observed.
But the fact remains that there have been fires. Where there is such a great concentration of high fire risk installations, there is always the danger of one accident setting off a chain reaction. Over the years we have had many warnings, arising from a variety of hazardous undertakings, sometimes restricted to one installation, sometimes involving others. First, we have the existing high fire risk installations—that is the term used by the Essex Fire Brigade—each of which is a risk on its own but which, when taken together with one or more, of its neighbours, represents a risk of great magnitude.
The Essex Fire Brigade advises me that in the last ten years—the period during which I have consistently opposed the introduction of oil refineries on Canvey Island—there have been no fewer than 128 fires in these installations. Not all of them were serious, of course, but a number were. That they did not lead to disaster owes everything to the skill and gallantry of our undermanned fire service.
These one might call static risks. But there are also considerable and ever-growing quantities of inflammable and dangerous oil products and chemicals transported from these installations along


our restricted roads, with occasional spillages. These one might describe as mobile risks. We should always remember that Canvey is an island, not a community in the heart of the country. This means that there is also an ever-present danger of collision between vessels carrying dangerous cargoes to and from the oil jetties on Canvey and next door in Thurrock, and of setting fire to them.
The danger is heightened by the addition of a new jetty for the Occidental refinery, which will mean that considerably more tankers will be manoeuvring in the confined space between the island and the mainland. This is not my view, but that of the Port of London Authority itself.

Dr. Hampson: Will my hon. Friend clarify how the railway is to get from the island to the shore? I am ignorant of precisely what this Bill requires.

Sir B. Braine: Under the British Railways Act 1972 powers were obtained from Parliament—and in fact the hon. Member for Islington, South and Finsbury, told us this—to bring a railway on to the island. That railway, as the hon. Member carefully explained, falls short of the site of the proposed refineries and thus the powers to build it are utterly useless unless the House gives the further powers asked for in Clause 6 of this Bill.
The view I was expressing a moment ago is that of the Port of London Authority itself. The Authority frankly admits that the number of ships which are likely to use the narrow confines of the Thames above Southend would create congestion, with the danger of accidents and serious damage to the environment.
The hon. Member for Islington, South and Finsbury acknowledged that there was anxiety about refineries, but I must tell him that our anxiety extends far beyond the refineries. The hazards are multiple. It is, for example, an open secret that the Mobil Oil refinery next door is disturbed at having the Occidental jetty so close to its own jetty.
It is neglect of considerations of this kind that characterises the handling of the whole problem. Traffic will certainly grow. As a result of persistent efforts on my part, we can measure how far it will grow once the Occidental Refinery is in full operation.
A few days ago I asked the Secretary of State for Industry what tonnage of petroleum products is expected to be handled at the Occidental jetty. The answer was that refined products expected to be shipped from it are expected to amount to between 4 million and 5½million tons per annum. Hon. Members will note that the answer did not add how much crude oil would be brought in. However, one must be grateful for the minimal information one is able to drag out of the authorites.
The total tonnage of oil moving into the Thames Estuary—excluding the Medway—has been averaging about 24 million tons in each of the last five years while the internal movement of oil products has averaged about 4 million tons. One can see that the Occidental development alone will double the outward movement of oil products and must inevitably add—

Sir Harmar Nicholls: Do I gather from my hon. Friend that he has been having difficulty in obtaining this information? I would have thought that it was their duty to provide him with all the information he wanted when safety is involved, and when this affects the general national reaction.

Sir B. Braine: My hon. Friend will have gathered from my earlier remarks that we have been waging a persistent war against these departments. It has been difficult to get the required information, upon which to base a judgment. This is all the worse because, as my hon. Friend rightly says, this is a matter touching on the safety of a sizeable community.
What this means in terms of shipping movements was revealed last month when the director of Maplin seaport project was reported in The News of Essex of 28th June as saying:
Three hundred tankers a year are now using the Thames to deliver crude oil to the refineries. When the two refineries at Canvey are constructed and the proposed one at Cliffe, this will mean 500 tankers a year will use the Thames".
Perhaps I should explain that it is one of the purposes of the Maplin seaport to eliminate traffic of this kind and to deliver to the refineries by pipeline, but, with the best will in the world, this lies several years ahead.

Mr. Stephen Ross: It was a point being made by the hon. Member for Islington, South and Finsbury (Mr. Cunningham) that the pipeline could not be put in on Canvey because it was not suitable to take away the oil. There was talk of heat and other things which would make it unsuitable to have a pipeline from this refinery to the mainland. Yet the hon. Member for Essex, South-East (Sir Bernard Braine) has just said that from the proposed Maplin seaport the oil will come by pipeline. Is not that contradictory?

Sir B. Braine: To be fair, I do not think that we are talking about the same pipeline. The hon. Member for Islington, South and Finsbury (Mr. Cunningham) was talking of the difficulty of transporting refined products away from the refinery. I am now talking of the delivery of crude to the refinery from the proposed Maplin seaport. These are two entirely different things. I do not accept the argument that it is impossible to pipe a product away. The hon. Member for the Isle of Wight (Mr. Ross) is implying some additional hazard here which I would want to investigate. It may be one reason why my local authority is so opposed to the establishment of the railway link which is empowered by the Bill.
The director of Maplin seaport project went on to say:
Inevitably, this increase in shipping will go ahead before we can construct the pipeline The Occidental refinery is due to be operational in two years' time It would take us 3½ years to install the pipeline.
We should remember, however, that there has been no decision as yet to authorise the Maplin seaport. I know that this is a controversial matter—

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. This is an interesting argument, but there is much business to be done tonight. Is not the hon. Gentleman now being very repetitive, and is he not raising matters which go beyond Third Reading? I have always understood that the Third Reading debate is very narrow. On the occasions when I have attempted to do what the Gentleman is doing I have been brought up sharply by the Chair insisting that I speak only on matters in the Bill. I am wondering what the hon. Gentleman has been doing. Am I to understand that the rules of the House have been changed?

Mr. Deputy Speaker: I have requested the hon. Member for Essex, South-East (Sir Bernard Braine) to keep within the rules of order, on the very point that on Third Reading of a Bill the measure is drawn very tightly. The hon. Gentleman has heeded my warning, and generally he has taken my point. I shall watch the matter carefully.

Sir Harmar Nicholls: Further to that point of order, Mr. Deputy Speaker. The point raised by the hon. Member for Hackney, South and Shoreditch (Mr. Brown) is not fair. The pipeline is not mentioned in the Bill, but the argument being made was that the railway was replacing a pipeline.

Mr. Deputy Speaker: I do not think we want to get into what I can only describe as a counter-debate. I take note of the point.

Sir B. Braine: The prospects are that at best we can expect a very substantial increase in oil tanker traffic in the estuary for a few years until the seaport and pipeline have been built, and at worst a permanent increase of not less than 66 per cent. in that traffic. Nor are the hazards limited to tanker traffic. For example, it has been the practice for a long period for ammunition to be loaded from barges into ships off Canvey Island. On 1st March last a quantity of explosives fell overboard as it was being loaded on to the ICI explosives ship "Lady McGowan" about a mile off Chapman Point. The explosives were seen floating on the tide towards Southend, but then disappeared. I was told about this and I launched inquiries. Home Office explosives experts, Department of Trade officials and representatives of ICI met to discuss the incident. I was assured that there was no danger, that the explosives were not fitted with detonators and would deteriorate in the sea, and that they would become completely safe after about eight weeks.

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. I do not quite see how the railway can run into the sea. We seem to be discussing explosives. I fail to see how they are relevant to British Rail Board. I do not follow how the railways run into the sea, causing explosives to be dumped into the sea.

Mr. Deputy Speaker: Perhaps I should explain. I think that the hon. Gentleman is trying to explain that the very fact that the railway is to run into Canvey Island makes more difficult the problems which he claims already exist in the island. I think that he is in order in this instance.

Sir B. Braine: I am most grateful to you Mr. Deputy Speaker. I have a great regard for the hon. Member for Hackney, South and Shoreditch (Mr. Brown). I am not sure that he heard the earlier part of my argument when I dealt with the point that has been worrying me. If he will be patient he will see that there is a close connection between all these hazards.
Less than a fortnight after the loss of these explosives overboard a small coaster, the "Katherine Mitchell", which normally carried explosives, went aground and rammed into the Canvey sea wall in thick fog. It happened very close to the methane plant. Happily, the vessel was unladen. For years I have been warning about deteriorating standards of navigation in the Thames. On this score I have no criticism to make of the PLA. It is a responsible body which shares our concern and which always responds with the utmost speed to every inquiry I make. It does all it can to raise the standards of navigation in the river.
In fact the accident would never have occurred if a safety plan suggested by the PLA had been put into operation. On 14th March the Evening Echo carried a report which said that Mr. John Lunch, Director General of the PLA, had been reported as saying that if everyone concerned with safety on the Thames, including the PLA and shipowners, had agreed to PLA recommendations on radar and radio the accident would not have happened. At recent meetings, it said, the PLA suggested that in poor visibility ships over 50 tons should not move in the Thames unless they were fitted with both operational VHF radio and radar.

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker I must insist that British Railways has no power over navigation on the Thames. As far as I am aware there is no statutory argument that it has responsibility for any forms of radar or navigation. I do not understand why this debate is being allowed to range

over means of navigation on the Thames which are not applicable to Blackfriars Bridge, Southwark Bridge or any other bridge which carries the railways. If you are allowing a debate on transport generally Mr. Deputy Speaker we should have it at the proper time.

Mr. Stephen Ross: Further to that point of order, Mr. Deputy Speaker. Is it in order for an hon. Member who entered the Chamber only ten minutes ago to raise points of order when those of us who have been here since the beginning are satisfied with what is happening?

Mr. Deputy Speaker: The question is whether the Chair is satisfied. I think that the hon. Member for Essex, South-East is straying a little. I am listening carefully to what he says, and he understands the position. I am prepared to let him continue.

Sir B. Braine: For the benefit of the hon. Member for Hackney, South and Shoreditch, I will spell out the connection again. We have all night if necessary. I am determined that Parliament should understand the web of risk in which my constituents are enmeshed. I will not be denied the right to state my case by irrelevant interruptions.
The Bill brings a hazard in itself the railway line and the oil sidings to serve the proposed oil refineries; These two major hazards are to be constructed alongside a population of 30,000 souls. I am in the process of describing a host of additional hazards. Is it beyond the wit and imagination of the hon. Gentleman to visualise—

Mr. Ronald Brown: Not on Third Reading.

Sir B. Braine: Perhaps the hon. Gentleman will contain himself, and at some time face the people of Canvey Island and explain to them why he bursts into the middle of the debate and is unwilling to listen to a case affecting the health, safety and peace of mind of 30,000 people.
I want to establish that there is a connection between poor standards of navigation in the Thames such as this incident involving an empty ammunition ship crashing on to the sea wall beside a high fire risk installation, and the safety of the people I represent. Another PLA


spokesman was quoted in our local Press as saying that the authority was continually campaigning for a tigthening up of safety in the Thames. He said that the PLA agreed on many points with Canvey oil refinery protesters who feared that refineries would bring extra shipping and more dangers. He added:
The Department of the Environment is aware of the points made on safety that we
—the PLA—
would like to see brought into operation. They are leaving it to us to negotiate with the various bodies concerned
There were other incidents, too, involving a variety of vessels. For example there was the incident in April, when the "Lachs", a tanker carrying 2,600 tons of petrol rammed the Texaco oil jetty on Canvey. According to the Texaco company, this was a relatively minor incident. No one was injured. There was no spillage and there were no pipe fractures. To the annoyance of the PLA, however, the company did not bother to report the incident.
Yet it does not take much imagination to see, if a 100-ton coaster, which might have been carrying ammunition, and a tanker carrying 2,600 tons of petrol, cannot be handled properly alongside the existing concentration of high fire risks on Canvey, what is likely to happen when 100,000-ton and 250,000-ton tankers are due to come to the Occidental oil jetty now under construction, and a little slip is made in these narrow and constricted waters. Is it not clear from all that I have said that Canvey is enmeshed in a thick web of risks, any one of which might trigger off a disastrous train of events?
We in South-East Essex have not sat down and allowed this situation to happen without protest. Over 10 years ago when I opposed the first refinery application a strong protest group was formed in Canvey. Their representative, now a Castle Point district councillor, gave evidence at most of the public inquiries into the oil refinery applications.
About the time of the public inquiry into the Occidental application in 1971 a new protest group, the Canvey—now Castle Point—Oil Resistence Group, came into existence and ever since has waged a vigorous campaign. The effect has been to cause the local residents to look much more closely at what is hap-

pening, to try to assess the risks to which they are being subjected. Many of them are well qualified to do so. They include engineers, surveyors, local government employees, and skilled men who work in high-risk installations. The wool cannot be pulled over their eyes. They can judge these matter for themselves. As a result, they are asking questions that the Department of the Environment should have been asking for years past.
I appeal to hon. Members to try to put themselves in my shoes. What would hon. Members do if intelligent constituents put the following question to them? Supposing fire broke out at any one of the existing installations, as it has done not infrequently in the past, and for once the fire led to an explosion which breached the sea wall. Remember that Canvey is an island and below sea level at high water, so that to the hazard of fire would be added the hazard of flood.
Now this is not an imaginary danger, I saw for myself the devastating effect of the great tidal surge in 1953 when the whole of the island was flooded. It does not take much imagination to visualise what might happen. May I read an extract from a letter written to me by a constituent last year? In his view the authorities seem to have specifically planned the greatest disaster our country has ever seen. He contends that if something went wrong there could be a snowballing effect. He wrote:
I would imagine that an explosion at a single plant could easily blow a hole in the sea wall. With flooding the cooling machinery at the methane plant would cease to function with the possibility of liquified natural gas rising in temperature and vapourising. By this time we could have a flooded island with petrol and crude oil floating on top of the sea water and methane gas escaping into the air. What a spectacular explosion would result! How the House of Commons would deplore the shortsightedness of such planning! Remember Aberfan.
My constituents need not remind me about Aberfan. The lesson of that tragic experience was burned into my mind.
Moreover, in raising the question of flooding my constituents remind me that, with the construction of the Thames barrage, tidal levels will rise at certain times necessitating the raising of the defences and Canvey's sea wall. I assure the House that there is a genuine anxiety about the effect that this could


have upon the strength of the sea defences should they be breached. For example, at the public inquiry into the Occidental application it was asserted by the navigational assessor that the risk of a vessel doing serious damage to the sea wall at Canvey—

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. I have now raised a number of points of order. I know that the hon. Member for Essex, South-East (Sir B. Braine) has informed the world outside that he intends to ruin the rules of the House for three hours. I have attempted on occasions to talk at length on Third Reading and I have been held tightly in rein by the Chair. I regard what is now happening as a new departure. I can find nothing in the Bill, be it good or bad, which refers to sea walls or anything of the kind involving the British Railways Board. I do not believe that the board has an interest in navigational matters. I ask you, Mr. Deputy Speaker, to call the discussion to order.

Mr. Deputy Speaker (Mr. George Thomas): I am much obliged to the hon. Member for Hackney, South and Shore-ditch (Mr. Brown). I may be an innocent from abroad but I thought that the hon. Member for Essex, South-East (Sir B. Braine) was concluding his speech. I am at a disadvantage in that I do not know where the sea wall is situated. I do not know whether it is by the railway. If the hon. Gentleman would tell me then I could rule very quickly.

Sir Harmar Nicholls: On a further point of order, Mr. Deputy Speaker. Is Mr. Deputy Speaker allowed to accept a suggestion that he is so neglectful that he is allowing a Member to deliberately ruin the rules of the House? That is what the hon. Member for Hackney South and Shoreditch (Mr. Brown) has suggested.

Mr. Deputy Speaker: I always believe the best of what anyone says. I am sure that the hon. Member for Hackney, South and Shoreditch would not have implied that. Perhaps the hon. Member who is addressing the House would be kind enough to tell me whether the sea wall has anything to do with the railway.

Sir B. Braine: It has everything to do with it. Those who have listened to the

debate from the beginning know full well that my argument is simply that the provisions in Clause 6 of the Bill introduce into Canvey an additional hazard. I have been describing—

Mr. Deputy Speaker: Order. I heard the hon. Gentleman advancing that argument the previous hour when I was in the Chair. He is not helping in repeating that argument. I know that that is so because he has already advanced it to the House.

Sir B. Braine: The story does not need any repetition. But it is such a grim one of neglect and wilful misunderstanding that it has to be spelt out in detail. You asked me an important question a moment ago, Mr. Deputy Speaker, about what the sea wall had to do with the railway. I have pointed out more than once that Canvey is an island. It lies beneath the level of high tide. To protect its 30,000 inhabitants from flooding it has a sea wall. Anything coming on to the island must cross over the sea wall. Anything coming on to the island has to be measured and evaluated from the point of view of whether it adds to the security of the community or detracts from it.

Mr. Deputy Speaker: I am obliged to the hon. Gentleman. I am thoroughly convinced. Sir Bernard Braine.

Sir B. Braine: Thank you, Mr. Deputy Speaker.

Mr. Tebbit: I am sure we want to hear about the security of the sea wall and the likelihood of its being breached in any of the ways described by my hon. Friend, with the resultant flooding of the railway line. If there were an engine and train on the line at the time of the flooding, whether it were full of chemicals or with passengers on board, it would constitute a grave hazard to the railway line. Hence we would be anxious to be assured about the safety of the wall in the event of a ship running into it, as my hon. Friend described.

Sir B. Braine: My hon. Friend is asking the sort of question that should have been answered at the various public inquiries which have been held. I am on the point of saying that at the public inquiry into the Occidental application, it was asserted by the Navigational Assessor that the risk of a vessel doing serious damage to the sea wall at Canvey was non-existent. It


was held that the tidal pattern was normal and that heavily-laden tankers of 100,000 tons could not possibly run into the sea wall but would run aground well short of it. That is not so. We experience unusual tidal ranges from time to time. The 1953 floods were a graphic example, but there have been others since.
The effect of the Thames barrier will be to ensure higher tides. There are circumstances in which we can expect a greater rather than a lesser number of instances of vessels hitting and breaching the sea defences. I do not wish to be dogmatic about this, but had there been the sort of inquiry into the totality of risk in the Thames for which I have asked, and which has been repeatedly refused by successive Secretaries of State for the Environment—what an inept title, incidentally, for the mandarins of Marsham Street!—this is certainly one of the matters which should have been considered.
Then, suddenly and for a brief moment, it looked as though the truth might begin to penetrate. On 3rd November last another fire occurred at the Shellhaven refinery—the third fire at that installation in three years. The cause was unknown and it is not without significance that the Chief Fire Officer of Essex informed me recently that the cause is still unknown. The damage was immence. A spokesman for the company told the local Press that the cost of replacement would be in the region of £11 million. Over 200 firemen from Essex and London were sent in to fight the blaze which was described by the Chief Fire Officer for Essex as very difficult to tackle—
The most severe of all the fires at the refinery.
Once again, the Essex firemen saved the situation.
Not unnaturally the effect on my constituents who could see the blaze was disturbing. A spokesman for the Refinery Resistance Group was reported in the Evening Echo of 5th November 1973 as saying:
We sent representatives down to Shell haven to see the fire and gather information. They were horrified by it, their feelings were of great distress.
How long are the powers that be going to keep their heads buried in the sand?
Canvey in already at risk with a big methane gas plant and an oil storage depot. It's going

to be like sitting on a bomb when the two refineries are built.
I'm not trying to be a scaremonger, but it's asking for disaster to put two more oil plants on Canvey.
On 16th November, less than a fortnight after the fire at Shellhaven, the hon. Member for Eton and Slough (Miss Lestor) initiated a debate on the subject of a serious fire which had been taking place at an oil depot at Langley in her constituency. I mention this particularly to demonstrate to the hon. Member for Hackney, South and Shoreditch the close connection between the proposals in the Bill and fire hazards.
The Langley oil depot was served by a railway line. There had been previous accidents there which had caused anxiety. On 5th October there was an explosion involving an oil train. People living nearby had to be evacuated from their homes. Apart from observing that the Bill gives British Railways powers to build a line to serve a similar purpose and that the Langley fire showed that this can be a hazardous installation, I will say no more of what happened there.
But the debate provided a splendid opportunity which the hon. Lady recognised of focusing attention on Canvey's predicament, and I seized that opportunity. I will not repeat all that I said on that occasion, but I protested again at the persistent and wilful failure of Governments to consider the implications of the piecemeal industrial development in the Thames estuary. I urged the then Minister for Local Government and Development, my right hon. Friend the Member for Crosby (Mr. Page), to consider setting up an inter-departmental inquiry to take account not merely of the various planning decisions, but the health and safety factors involved. I pointed out that the Department of the Environment was responsible for relations with local authorities and for planning decisions and the like, but that ultimate responsibility for safety rested with the Home Office while responsibility for navigation on the Thames and for transporting dangerous cargoes rested with the Department of Trade and Industry, as it then was. I said that it seemed that there was an urgent case for the setting up of an inter-departmental inquiry to look at the totality of the effect of the matters being discussed upon the environment, and


upon the health and the peace of mind of tens of thousands of people living in South-East Essex. I concluded that there was clearly a case for a co-ordinating authority.
My right hon. Friend's reply was interesting and unusual. What he said is relevant to what we are discussing. He admitted that he, too, had been anxious about the matter. He said
A few weeks ago, because of my anxiety—the same anxiety as my hon. Friend has expressed—whether we were reaching saturation point with oil refineries in this area, I spent a whole morning flying over it in a helicopter, because one gets a much better impression of this sort of development from the air.
From that experience, I believe that my hon. Friend is right—that we ought to consider very carefully the whole implications of any further development of this kind in the area."—[OFFICIAL REPORT, 16th November 1973; Vol. 864, c. 903–4.]
That was the first glimmer of sanity for nine years and the first indication that anyone was prepared to look at the matter objectively. I was delighted. I assumed that within weeks we should have news of the inquiry and an indication of what was to happen. But before there were any developments we were plunged into a General Election.
However, for some months before the General Election it was clear that the Labour Opposition were beginning to take an interest in the matter. It is not for me to dilate upon their motive. It might have been remorse for the way that the Canvey Labour Party and the Labour Government in 1964–65 had sold the pass. What did it matter? There is, after all, more rejoicing in Heaven for the one sinner who is repentant than for 99 just persons. But whatever the motive there suddenly appeared on the scene a potentially powerful ally, no less a person than Labour's Shadow Secretary of State for the Environment, the right hon. Member for Grimsby (Mr. Crosland).
According to the Evening Echo of 17th April, with the bold headline "Labour brings the oil war to Westminster", it was announced that the right hon. Member for Grimsby had given the assurance that
the Labour Party will be fighting for the people of South-East Essex. It believes all refinery development should go to Scotland or the North-East where it is needed.

On 25th April the same newspaper revealed that the right hon. Gentleman would lead what was described as "the bitter battle inside Parliament". Since my first loyalty is always to my constituents, as I hope has been made clear tonight, I was frankly delighted to hear the news. I felt like the commander of a fortress that had been under a long seige, its walls battered, its garrison depleted and low in spirits, and with death or surrender the only prospect ahead—

Mr. Deputy Speaker: I tried not to interrupt the hon. Gentleman when he was making his political points, but it would be helpful if he would now come back to the Bill itself, and to why it should or should not have a Third Reading tonight.

Mr. David Crouch: My hon. Friend referred to the right hon. Member for Grimsby (Mr. Crosland) having supported him in the concern that he has rightly shown for his constituents in South-East Essex and on Canvey Island. May I assure my hon. Friend that I, too, on the other side of the estuary, have no less concern than that expressed by the right hon. Member for Grimsby. I hope that my hon. Friend will not forget that. I shall support my hon. Friend to the hilt in the case that he is making tonight, and I hope to hear much more from him because this is a matter of concern not only to the people on Canvey but to those on the other side of the estuary in my constituency. My hon. Friend has made a good beginning, and I hope that he has much more to say.

Mr. Deputy Speaker: Order. I accept that that intervention was meant to be helpful, but I appeal to hon. Members to give the hon. Member for Essex, South-East the chance to make his own case, which I think he is able to do without assistance.

Sir. B. Braine: I am grateful to you, Mr. Deputy Speaker, and to my hon. Friend the Member for Canterbury (Mr. Crouch) who has been a staunch ally throughout this affair.
I was painting the picture of someone who had been fighting a lone battle for a long time, and suddenly it was announced that no less a person than the Shadow Environment Secretary would


lead "the bitter battle inside Parliament". It suddenly seemed that rescue was nigh; that the relieving force under the command of an experienced general was on its way.

Mr. Deputy Speaker: Order. It is on its way, but if the hon. Member will tell me to which clause he is speaking it will be helpful to me.

Sir B. Braine: I am referring to Clause 6, Mr. Deputy Speaker. Despite my high hopes of help from new allies nothing happened. The relief column never materialised. The general appointed to lead "the bitter battle in Parliament" did not appear. Indeed, when the Canvey protest group came to the House of Commons to urge the right hon. Gentleman to rally his troops he could not be found.
The right hon. Gentleman did not find his voice until the General Election and then, according to the Evening Echo of 15th February, in a letter—

Mr. Deputy Speaker: Order. The hon. Member has done exceedingly well, if I may say so, in staying in order for so long. It would be a pity if he were now to wander as far as he appears to be doing from the reasons why the measure should not have its Third Reading tonight. I am trying to be helpful to the hon. Member.

Sir B. Braine: If you will listen to the development of my argument, Mr. Deputy Speaker, you will see how, suddenly, hope was given to us in writing that certain things were likely to happen which would have made, for example, the provision in Clause 6 quite unnecessary.
In this letter the right hon. Member for Grimsby said:
I am greatly concerned about the proliferation of oil refineries on Canvey Island … If and when I become Labour's Minister of the Environment I shall look again at the whole Canvey situation and try to find a more satisfactory solution to the whole problem of the future of the area.
That that pledge was meant to be taken seriously was underlined by the personal intervention of the right hon. Member for Huyton (Mr. Wilson). In the middle of the election campaign, his personal assisitant, Mr. John Ryman, wrote to the Secretary of the Oil Refineries Resistance

Group and gave the right hon. Gentleman's assurance that
A new Labour Government would reexamine the proposals for the construction of these refineries in the light of strong objections from local residents.
But there followed a passage which showed how little the right hon. Gentleman had grasped the problem, because the letter continued:
On the face of it, it is most unusual for a Minister to reject the recommendations of the inspector who conducted the inquiry and therefore there is a very strong case for a thorough and full investigation of the whole affair, pending which no planning permission would be granted.
The right hon. Gentleman was wrong on both counts. Planning permission had already been granted for both refineries. One of them was already under construction. As for Ministers rejecting the recommendations of their own inspectors, it had been the right hon. Gentleman's own Minister, the former right hon. Member for Coventry, East (Mr. Crossman), who had set that bad example when granting the first planning permission in 1965.
However, one should not be too critical for here were specific assurances from the men who were shortly to find themselves back in office and who, if they chose, could transform the situation. That was five months ago. Since then we have had this Bill brought before the House. Since then, I am sorry to say, there has been no evidence that these promises are likely to be implemented. Indeed, all the indications are in the opposite direction. Parliamentary Questions have elicited the fact that no progress has been made with the inter-departmental inquiry I asked for in November. The Government have specifically declined to undertake the wide-ranging study I have always had in mind.
Then we learned that the new Secretary of State, last year's leader of the "bitter battle inside Parliament"—which never took place incidentally—"was minded to grant planning permission" to yet another oil refinery at Cliffe, just opposite the Thurrock refineries in Kent. On 2nd April I had the pleasure, in company with my hon. Friends the Members for Gillingham (Mr. Burden), Canterbury and Faversham and Maldon (Mr. Wake-ham) of persuading the House to throw out the Bill authorising facilities at Cliffe.
The main question still had to be answered. Would the new Government implement the pledge
to re-examine the proposals for the construction of these refineries in the light of strong objections from local residents.
Soon after the General Election I reminded the new Secretary of State that we were expecting him to implement his undertaking. He finally agreed after a long delay, to receive a deputation led by me, comprising representatives of the new Castle Point District Council, which now covers Canvey and Benfleet, the Canvey Ratepayers' Association and the Refineries Resistance Group. That meeting took place on 28th May.
We outlined our case and made three specific requests. The first was that the Minister should revoke the planning permission given to United Refineries, which is the installation which would be served by the railway line proposed in this Bill. Second, we asked that he should make a discontinuance order in respect of the Occidental refinery which was already under construction, albeit at an early stage. Third, we asked that he should have a look at the area as a whole, as my right hon. Friend the Member for Crosby had done last year, and determine that there should be no further assault upon our environment and that no further risks should be taken with the safety of the people of South-East Essex.
The right hon. Gentleman refused the first two requests. He made no reference to the third. He even expressed surprise that the deputation was opposed to both refineries. When we made it plain that it had never been otherwise and that this was on the record, he admitted, somewhat lamely, that he had been misled. He had been told that we would have been satisfied with the removal of one refinery. So much for the knowledge and understanding of the problem shown by the commander appointed a year before to lead the "bitter battle in Parliament". He had not only absented himself from the field—he did not even know what the battle was about.
The right hon. Gentleman was in good company. My right hon. Friend the Member for Worcester and my right hon. and learned Friend the Member for Hexham, and the right hon. Gentleman's former

colleague who had represented Coventry, East and with whom the whole miserable deterioration of our affairs had started, had all failed to understand what the battle was about. Of course the right hon. Member for Grimsby had been misled—whether by senior civil servants or some local party hack looking for political advantage at the time of the General Election we shall never know. All one can say is that we were given one more illustration of the lax, slipshod and generally unsympathetic way in which those in authority have always treated our case.
However, the right hon. Gentleman thought a way out might be found if the two oil companies which would be served by the railway provided for in the Bill would merge their operations into one refinery. There was nothing new in that idea. It had been mooted before. My right hon. Friend the Member for Crosby had mentioned the possibility in November last year when he said:
I believe now that the two companies are in negotiation to combine their refineries".—[OFFICIAL REPORT, 16th Nov., 1973; Vol. 864, c. 903.]
If they were then, nine months have since elapsed without any sign of agreement, The right hon. Gentleman assured us that it was the Government's firm wish that such a merger should take place and that the Secretary of State for Energy himself was having talks with the companies on the subject. That was the only encouragement we were given. There clearly was no intention of revoking planning permission, and even the prospect of two refineries being merged into one, which gives no joy to my constituents, since the total volume of crude oil arriving and of products being shipped out will remain the same—

Sir Harmar Nicholls: Has my hon. Friend discovered the amount of compensation that would have been payable had the planning permission been revoked? That may be a consideration which he has not taken into account.

Sir B. Braine: No, I have never sought to discover that, and I do not think that I would succeed if I tried. But my hon. Friend has put a perfectly valid question, since the longer the time that elapses the greater will be the compensation payable if the permission is revoked.
What of the merger? It was talked about a long time ago. The Secretary of State for the Environment thought that it was a possibility. That his colleague, the Secretary of State for Energy, had been seeing the companies indicated that the Government thought that it was within the bounds of possibility.

Mr. Ronald Brown: On a point of order, Mr. Deputy Speaker. Nowhere in the part of Clause 6 which deals with Work No. 3 in Essex is it said that the railway is to be used only by one class of user. Whether any petrol refinery in any part of the country should be merged or not merged is not relevant.

Sir B. Braine: I think I can help by reminding the hon. Gentleman, who did not hear the earlier part of the debate—

Mr. Ronald Brown: I have heard it all.

Sir B. Braine: Then if the hon. Gentleman has been here all the time, he could not have listened. The proposal in the Bill is to provide a rail link to serve new refineries on Canvey Island which will add considerably to the great mass of hazards which we already have. If the hon. Gentleman cannot grasp that, he is incapable of grasping anything.

Mr. Deputy Speaker: Order. I am much obliged to the hon. Member for Essex, South-East, but he has advanced that argument and the House is cognisant of it.

Sir B. Braine: I knew that I had your ear, Mr. Deputy Speaker. I thought that it would be unnecessary to repeat what I had said, but I wanted to help the hon. Gentleman.

Mr. Ronald Brown: Further to that point of order. The hon. Gentleman keeps on repeating an untruth. I have followed his argument on the Bill over many months and I understand it. The interests of the House are not best served by hon. Members taking advantage of the Chair and using a Third Reading debate to make a Second Reading speech. I am not concerned whether the arguments about oil refineries are relevant. We are on the Third Reading of a Bill on which those arguments have already been advanced. If that is in order in a Third Reading debate, it is certainly repetitive.

Mr. Deputy Speaker: As I am following the hon. Gentleman—as I have for a long time—he is advancing reasons why the Bill should not be read the Third time. I gather that that is the general purport of his speech. Every hon. Member is entitled within the rules of the House to advance his case at whatever length he decides. The Chair does not decide for how long an hon. Member shall speak, but every hon. Member bears in mind the interests of the House.

Mr. Crouch: Further to that point of order, Mr. Deputy Speaker. The hon. Member for Hackney, South and Shore-ditch (Mr. Brown) has to my knowledge on four occasions disputed the ruling of the Chair on whether my hon. Friend the Member for Essex, South-East (Sir B. Braine) is in order. Each time I have heard your ruling from the Chair that my hon. Friend is in order.

Mr. Deputy Speaker: I appreciate the hon. Gentleman's concern for me but I am not sensitive to any criticism. If I hear any from anywhere, I will immediately let the House know. I have not heard any yet.

Sir B. Braine: We had reached the stage where there was talk of a merger of the two refineries but there had been no further information.

Dr. Hampson: Would these refineries, merged or not, function without the railway line, or is this line of 1,545 metres essential?

Sir B. Braine: Only the oil companies can answer that. I would not presume to do it for them. However, the nature of the product of one of the refineries is such that the company says it would need the railway line while the other company says it would be prepared to pipe its product.
The situation was transformed by the Flixborough disaster. The nation was shocked, and Parliament showed deep concern. Since an investigation of that tragic occurrence is under way, I must not and would not wish to comment. But 1,200 tons of cyclohexane, the material used at Flixborough, is stored at Canvey Island by London and Coastal Oil Wharves. I doubt whether before the Flixborough explosion local residents at Canvey knew that cyclohexane was stored there. Now minds were concentrated for


the first time outside Canvey on the risks involved.
When the Secretary of State for Employment made a statement about Flixborough on 3rd June, I drew his attention to the urgent implications that this tragic accident had for those areas where there was too great a concentration of high fire risk installations. I asked the right hon. Gentleman whether the inquiry ordered into the Flixborough disaster would cover our own situation, since the Secretary of State for the Environment had just refused an inquiry into the totality of risk to the Thames-side communities.
I also asked the right hon. Gentleman to ask the Prime Minister himself to take a grip on the situation and order the two refineries to cease building until such time as the inquiry's findings were made known. One could not expect the Employment Secretary to go into detail then, but he indicated that our situation was one reason for considering how wide the terms of reference of any inquiry into the Flixborough explosion should go.
The national Press fastened on this point. Next day, the London Evening News said that I was right to call for urgent action and that Government inquiries could be slow and cumbersome. On 9th June the Sunday Times, in a forthright article headed
Canvey Island: is the scenario for a new disaster?
went to the heart of the matter by saying:
Canvey Island, as it happens has one of the biggest concentrations of major fire risks in the country. And in the wake of the Flixborough disaster, Canvey's MP, Sir Bernard Braine, was quick to seize upon the broader implications and issues raised by the explosion at the Nypro plant. They are simply stated: At what point should the industrial and financial logic of, say, concentrating oil facilities so thickly on Canvey give way to concern about the safety and quality of life of people living there?
That is the crux of it. The article went on to describe the deterioration of the environment which the refineries would cause.

Mr. Ronald Brown: On a point of order. Mr. Deputy Speaker. I suggest that whether or not refineries are right or wrong is for the hon. Gentleman to pursue on another occasion. There is nothing in the Bill which empowers the

British Railways Board to take any control over refineries. The fact that refineries are there may be used by British Railways since they are a source of freight for them. If the refineries are taken away, British Railways still have other sources of freight. I suggest that we are not discussing the merits of oil refineries. If the hon. Gentleman wishes to discuss those, he can use his skill to obtain an Adjournment debate or raise the matter on the Consolidated Fund Bill. If he does, I shall support him. But he is not entitled to use this Third Reading debate on the British Railways Bill to pursue his justifiable argument.

Mr. Deputy Speaker (Mr. George Thomas): I must tell the hon. Member for Essex, South-East (Sir B. Braine) that the more that I study the Bill, the more I realise that it is concerned with the railway and that the general issues of the safety of other installations on Canvey Island belong to another debate. I must therefore ask him to confine himself to the Bill which we are considering.

Sir B. Braine: The Sunday Times article said:
The potential for disaster on Canvey, however, is sufficiently great for Essex County Council's emergency planning group to have devised a meticulous scenario for the very serious situation that could develop on the island.
I know that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) is most anxious to prevent me from spelling this out—

Mr. Ronald Brown: That is not true.

Sir B. Braine: Then I will do so once again. Against this background, any proposal to add the smallest hazard to Canvey's situation is damnable and is to be resisted be every possible means. When will the hon. Gentleman understand that?
That is my case. This Bill adds a hazard to a situation which is already fraught with grave hazards. Everyone else can recognise it, except the hon. Member for Hackney, South and Shore-ditch.

Mr. Crouch: In arguing that the railway is conducive to a possible additional hazard on the island, is my hon. Friend the Member for Essex, South-East (Sir B. Braine) referring to the tragic accident and disaster which occurred at Langley,


where a railway carrying products of a refinery constituted a hazard to people living in a highly condensed urban area?

Mr. Deputy Speaker: Order. Before the hon. Member for Essex, South-East answers, may I remind him that he has already dealt at length with that very point. He would be in danger of being called to order for needless repetition if he went into the same argument, at considerable length, to which I listened with interest.

Mr. Crouch: On a point of order, Mr. Deputy Speaker. I come back to the point of order raised by the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who queried whether references to the refineries were matters properly in order in relation to a railway in Clause 6. I suggested in my intervention that my hon. Friend's case was that the railway itself added to the hazards of the refineries in a condensed urban area.

Mr. Deputy Speaker: I do not know how long the hon. Member for Canterbury (Mr. Crouch) has been in the Chamber—

Mr. Ronald Brown: Not very long.

Mr. Deputy Speaker: If he had been here, he would have heard that argument dealt with at length by the hon. Member for Essex, South-East.

Sir B. Braine: I look to you, Mr. Deputy Speaker, for protection in this matter. I hope that by now the House appreciates the appalling dilemma facing an hon. Member in the situation which I have described. Should he give utterance to views such as those expresed in the Sunday Times article and open himself to the charge of being an alarmist, or should he play the whole matter in low key and hope that his very reasonableness would impress those in authority? Unhappily there are no signs that reasonableness pays With the exception of my right hon. Friend the Member for Crosby, who was not left in his office long enough to implement his undertakings, Ministers in general have shown themselves unable or unwilling to measure the gravity of what my constituents have been saying.
If I may adapt another of Burke's most telling phrases, there is a limit at which reasonableness ceases to be a virtue. There is a point beyond which one must

speak in loud and more insistent tones if one is to be heard by the deaf and those who will not listen. For me that point has long been reached.
Nevertheless, one would have thought that after Flixborough there would be a change of attitude, a new alertness, a willingness to admit that mistakes had been made. I acted on that assumption.
On the same day as the Secretary of State for Employment made his statement on the Flixborough disaster, I wrote to the Secretary of State for the Environment and asked him to recall that I had asked him, as I had asked his predecessors, for an inter-departmental inquiry. I wrote:
Like your predecessors, you refused to set up such an inquiry. Events have now overtaken us and the Flixborough tragedy shows that the Government has a duty to ensure that people are not exposed to unnecessary risk, especially where warning after warning has been issued over the years.
You will no doubt see the exchange I had with Michael Foot this afternoon and my specific request, which he did not answer, that pending the outcome of the wide inquiry to which he made reference the construction of the two refineries should be halted. In short, I am asking you once again to revoke the planning permissions.
Those were the planning permissions for the refineries which were to be served by the railways—

Mr. Deputy Speaker: Order. But not under this Bill. The planning permissions for the refineries do not arise under this Bill. It is the railway that arises under the Bill.

Mr. George Cunningham: On a point of order, Mr. Deputy Speaker. I should like to draw to your attention that the whole of the discussion relates, as you said, to one mile of railway, which is one of the works provided for in Clause 6, and that this has been almost the only subject of discussion on Second Reading and on consideration of the Bill. When the Bill came back from the Private Bill Committee and was considered in the House the hon. Gentleman moved an amendment solely directed to removing the authorisation for this one mile of railway. In the light of the fact that at previous stages exactly this point has been exhaustively and exhaustingly gone into, may I ask you to prevail upon the hon. Gentleman either to curtail his remarks or to give us an indication, which he must have since he is reading from


reams of notes, just how long he proposes to go on?

Mr. Deputy Speaker: I should never presume to ask any hon. Member to curtail his speech as long as he is in order. But there is no getting away from the fact that the Bill deals with the railway. I try, and every occupant of the Chair tries, to be as tolerant as possible when an hon. Member raises a constituency matter which is of great concern to him. I think that the hon. Member for Essex, South-East (Sir B. Braine) will fairly acknowledge that the Chair has been tolerant in allowing him to develop his case. But the question whether planning permission should or should not have been given for the refineries is not an issue which has to be approved by the House tonight.

Sir B. Braine: I am loth to quarrel with you, Mr. Deputy Speaker. As you know, I always bow to the Chair. But, under the Bill, a small length of railway line is to be introduced on to Canvey Island which will constitute a hazard. To say that it is a hazard, full stop, would be very satisfactory indeed to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) for, just as my amendment was defeated on the Report stage when 140 of his hon. Friends trooped in from outside, most of whom had not heard the argument, so the Bill might well get through tonight if hon. Members were denied hearing the detailed argument. It is my duty—I can do no other—to explain why this hazard, added to all the other hazards, is totally unacceptable. But for the unfriendly interruptions, I should have been through by now with my argument. As it is, there is a great deal more that I have to say. My people would never forgive me if, having secured the Floor of the House of Commons on an issue of this kind, I did not seek by every means to bring home to hon. Members the full gravity of the situation in which they find themselves. How many more times have I got to say that to the hon. Gentleman?
I agreed at the outset that this was not a normal Private Bill. It is manifest now, not merely from what I have said but from the conduct of the sponsor of the Bill, that it is most certainly not a normal Private Bill. He has told us that,

despite all these objections, to which he is in some degree sympathetic, the Bill must be rushed through to another place, it must become law by the 31st of this month, which would give no opportunity for consideration there of the weighty matters that I have been laying before the House.

Mr. George Cunningham: rose—

Sir B. Braine: I would suggest that the hon. Member, who no doubt was selected to sponsor the Bill because he has no interest in it, and who is a good Parliamentarian and adds much to the sum of wisdom in the House, should allow me to develop my argument. I am coming to my conclusion: he is only prolonging the matter.

Mr. George Cunningham: The hon. Gentleman has made some errors of fact which cannot be allowed to pass even it they do prolong our procedures by a short while. I have already pointed out to those hon. Members who were present at that time that the statement which the hon. Gentleman has just made is not true. It is not the case that the Bill has to be rushed through both Houses by Wednesday of next week, and there is no chance of that happening. In the House of Lords the procedures for the consideration of Private Bills are as rigorous as in the House of Commons, and their procedures would not permit the Bill to pass in that time.
The dire consequences to which I drew attention on the matter of police powers on railway property arise if the Bill is defeated tonight. This is because of an obscure provision, which I can explain privately but would prefer not to in an intervention, about the continuation of those powers if a Bill is in process of going through Parliament but has not been killed. But if the House kills the Bill tonight—I am grateful for the chance to repeat this—then, as from a week today, it will cease to be legal for British Transport Police or any other police to stop, search and arrest persons on railway property.

Sir B. Braine: I shall come in a moment to a proposition which might interest the hon. Gentleman.
I allow that the House has been very patient with me. It has had to listen to a story which I said at the outset was long


and bitter. I hope that the House will agree that the story is frightening in its implications for all of us. If those who, by the strange accidents of politics, are entrusted with the power to act as they have in this case, with such disregard for the interests of one small community, possessing neither the vision to see where their actions lead nor the courage to admit they were wrong, who knows what other stupidities may be committed?
The story I have told has a possible application to other communities in the kingdom. What has been at stake here is not merely the quality of the judgment of those who govern, but the whole of our democratic process. If, over and over again, the wishes of the elected representatives of the people at local level and here at Westminster are to be thrust aside and trampled underfoot, and attempts are made even to stifle the hearing of the case, how much is our democracy worth? It is against this sombre background that one has to consider the whole wretched proposal in this Bill to add one more hazard to those which my unfortunate constituents have had thrust upon them.
I explained my objections to the promoters of the Bill months ago and I pleaded for the removal of this obnoxious provision on Second Reading. I said then that no provision of this kind should find a place in the statute book. No Government and no public authority have the right to take chances with the safety of my constituents. Unacceptable risks were being taken. The time had come to call a halt.
It was my hope that the promoters would heed the warning, but no. So I was obliged to put down an amendment on Report. Again, I felt that even if the promoters lacked the wit, the imagination and the sensitivity to accept the amendment, the House itself would grasp the point and insist on cutting out the offensive provision.
This is a Private Bill and one would have thought that no hon. Member would lightly go into the Lobby to vote for a provision so injurious to another man's constituency. One would have thought that no Labour Member could have gone into the Lobby to vote for a provision which a Labour-controlled authority thinks is injurious to the people it represents. Yet that is what happened on

Report, when 140 Labour Members, most of whom, as I have said, had not even heard the argument, joined the hon. Member for Islington South and Finsbury and marched into the Lobby. No wonder the Labour Party in South-East Essex feels a sense of betrayal.
Perhaps the only excuse for that action was the misleading advice of the hon. Member who was hurt that I should seek to prevent a short stretch of railway line being built. Why should I pick on British Railways? Unfortunately the hon. Member had not grasped the background to the matter. He said:
The Secretary of State of course has power to revoke the planning permissions which have been given. I suggest that that is the direction in which hon. Gentlemen should be pressing their activities. That is the only way in which they can terminate, safeguard or limit the refinery activities there. They will not remove the abuse by preventing a one-mile stretch of single-track railway. They would have to get the Secretary of State to withdraw the planning permissions if this operation were to succeed.
One does not operate on a major matter like that by starting with a small and consequential matter like the rail link."—OFFICIAL REPORT, 26th June, 1974; Vol. 875, c. 1646.]
That is where he is wrong. When all else fails, when Secretaries of State will not use their powers, one seizes every legitimate opportunity to secure justice. One starts with a small and consequential matter. Not that it is so small a matter. Indeed, the defeat of this Bill tonight might well be a major victory for common sense since the obnoxious provision in the Bill is to serve the purposes of two unwanted refineries on Canvey.
There is another aspect of the matter which I must mention. In January, the Chief Legal Adviser and Solicitor of British Railways wrote me a courteous letter notifying me of the proposals in the Bill which affected my constituency. At that time, South-East Essex was larger and included the area in which the Third London Airport was to be located. The Bill included certain provisions in which I was interested, concerning Maplin, but these were later withdrawn.
The Legal Adviser referred to all the proposals and added:
It is perhaps worth mentioning that Occidental Oil Ltd., are unlikely now to want direct rail access to their refinery, favouring, for technical reasons, loading sidings on the mainland … to which their product would be pumped by pipeline.


So in respect of one refinery the provision in the Bill is unnecessary. The second refinery clearly wants the rail link.
The new Castle Point District Council is utterly opposed to the building of a railway which must cut through the little green belt land we have left and end in a depot which adds one more hazard to our already endangered environment. My hon. Friend the Member for Canterbury (Mr. Crouch) is right to remind the House of what I said earlier—that a rail depot handling inflammable products is itself a hazard. The Essex Fire Service has expressed a clear preference for piping oil products off the island, for this is infinitely safer.
I have stated at length why there should be no refineries on Canvey Island. It is still open for the Secretary of State to revoke planning permission for the one refinery that adds so greatly to the existing hazards. That is my answer to the promoters of the Bill.
The question arises whether the promoters, even at this late hour, might wish to reconsider the whole matter. If the hon. Member for Islington, South and Finsbury were able to consult the Parliamentary Agents, who are not a hundred miles away from here, and to indicate that they might be prepared to give an undertaking that the offensive provision will be withdrawn when the Bill goes to another place, I shall readily permit him to intervene. If, however, common sense and common justice are not to prevail, I serve notice that I shall oppose any motion for carrying over the Bill into the next Session or into another Parliament. I have little doubt that if this measure ever reaches another place there will be someone there with humanity and determination who, having read this recital of our grievances, will ensure that the measure receives a rough passage.

Mr. Crouch: Will my hon. Friend give way?

Mr. Ronald Brown: May I, Mr. Deputy Speaker, beg to move, That the debate be now adjourned?

Sir B. Braine: I have given way to my hon. Friend the Member for Canterbury.

Mr. Crouch: I was asking to intervene before my hon. Friend had sat down.

My hon. Friend has reminded the House of a very important and serious consideration. He has told us that the Essex Fire Brigade has recommended that this rail link is not preferable to an underground pipeline and that there would be a greater hazard in the rail link to carry these inflammable materials than if they were carried underground. When we had a short debate on the statement on the Flixborough disaster, Mr. Deputy Speaker, it was stated that local authorities and other authorities which should be advising on the safety of communities have a very serious responsibility in advising operators of dangerous plants of the best ways of safeguarding the community—

Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman is now making a speech.

Sir B. Braine: I should like to detain the House for a few moments more, in order to give the sponsor of the Bill an opportunity to take up the offer that I made a minute or two ago.
There have been two useful developments in recent weeks which in all fairness I should mention. The first has been the progress of the Health and Safety at Work Bill, which sets up a Health and Safety Commission. We all warmly welcome that. The safety of storages on Canvey Island will, I understand, come under its scrutiny. But it will be some time before that body assumes its responsibilities and begins to function.
The Secretary of State for Employment has assured me that the committee of experts set up following the Flixborough disaster will start work in advance of the Health and Safety Commission, and although its exact structure and terms of reference have not yet been decided, the problem of large complexes such as those at Canvey Island, Baglan Bay and Grangemouth will be well within its remit.
This a most welcome development, as far as it goes. But necessarily it relates only to the existing installations. There is no guarantee that it will be able to do anything about the refineries, one of which, as the House will know, is under construction. Our grievance, therefore, will remain. The Health and Safety Commission may be able to tighten up the


regulations governing the safety of each of the high-risk installations; that will be its function. But it cannot reduce the total volume of risk which, with the advent of the new refineries, will reach unacceptable levels.
While the Department of the Environment turns a blind eye to our predicament, Essex County Council is taking no chances. Hon. Members should know what is planned so that they can judge for themselves the gravity of our situation. Immediately after the Flixborough disaster details were revealed of a massive emergency operation that would swing immediately into action if a major disaster struck any part of Essex. A full account was given in onr local Press of a meeting the other day of the County Fire and Public Protection Committee. The plan, which was approved several months ago, was finally made public a few days ago, and spells out a massive countywide operation which "at seconds' notice" would:
Summon 500 fire appliances to a disaster area;
Throw up a cordon to seal it off completely from sightseers;
Flash TV messages appealing to people to stay away;
Call up five fire fighting tugs for instant action;
Rush in gallons of fire quenching foam;
Switch water supplies for fire engines from installations on Thameside, from Purfleet, to the Thames Estuary.
On 19th July the same newspaper revealed that a full-scale exercise to test hospital and emergency aid services in the event of a disaster in South-East Essex is being planned for the autumn. These are the realities against which the debate is being held. These are no imaginary fears on my part. This is what our local authorities are planning to do in the face of the mounting hazards menac-

ing our environment and to which this wretched Bill makes its contribution. Let there be no doubt about the scenario. The newspaper went on to say:
Southend district health administrator Mr. Malcolm Jefferies said: "We will be testing every aspect of the hospital emergency plans.
And it's possible we will base our exercise on a disaster in the Thames Estuary area, based on a Flixborough-type explosion with possible effects on Canvey and the immediate surroundings.
We haven't finally made our decision on the type of accident, but it will be on the type to extend our disaster plans fully.
It may be of some comfort to know that if the worst happens an efficient rescue operation will be mounted. But would it not be more sensible to reduce the possibilities of anything happening at all? That is what the argument is all about. If any hon. Member votes for the Third Reading of the Bill after all that has been said tonight he is consciously adding to the burden of unacceptable risk that the people I represent are having to bear. I cannot believe that any hon. Member is so insensitive and irresponsible as to act in that way, and I ask the House to strike a blow for the safety of a small community, to strike a blow for common sense, and to throw out this wretched Bill.

Mr. Ronald Brown: I have listened to the arguments put by the hon. Member for Essex, South-East (Sir B. Braine) and I recognise that he has a powerful case. I regret that he did not understand the procedures of the House and the right way to deal with the matter.
I believe that we have discussed this for a long time, and I beg to move, That the debate be now adjourned.

Question put, That the debate be now adjourned:—

The House divided: Ayes 0, Noes 1.

Division No. 99.]
AYES
[1.33 a.m.



NIL




TELLERS FOR THE AYES:




Mr. Bob Cryer and




Mr. Phillip Whitehead.





NOES



Braine, Sir Bernard




TELLERS FOR THE NOES:




Mr. Norman Tebbit and




Mr. Roger Moate.

It appearing on the report of the Division that forty Members were not present, Mr. Deputy Speaker declared that the

Question was not decided, and the business under consideration stood over until the next Sitting of the House.

Orders of the Day — INDEPENDENT BROADCASTING AUTHORITY (No. 2) BILL

Not amended (in the Standing Committee), considered.

Clause 1

EXTENSION OF PERIOD OF INDEPENDENT
BROADCASTING AUTHORITY'S FUNCTION

1.46 a.m.

Mr. Robert Cooke: I beg to move, in page 1, line 8, at end add
'or such later year as the Secretary of State may by order prescribe (being a year not later than 1981); Provided that no order shall be made under this subsection until the Secretary of State has received the Annan Committee's Report'.
Even though it is nearly two o'clock in the morning I should like to use the vehicle of the amendment to briefly explore the Government's mind a little further. I hope that we might have a short, sharp exchange so that other proceedings can be dealt with tonight. I know that we are keeping many people in the building who would like to be else- where.
We had a Second Reading debate and we had Lord Annan but no names for his committee. We had the Committee stage, where we did know the names and Lord Annan has now had his first meeting. We can assume, if I may re- mind the House, that all members of the committee now own a television set following the edict which his Lordship sent out to the committee members be- fore their first meeting. Lord Annan has made a Press statement to the effect that most people watch television or listen to radio and that people say that broad- casting has a greater influence than any other medium today. Lord Annan suggests:
that is why there are such frequent inquiries into a public service which is in almost everyone's home and is of such social significance.
Lord Annan talks of "frequent inquiries" and it is to be hoped that the Annan Committee's inquiry will be thorough and comprehensive. It is to be hoped that it is not in the Government's

mind as part of some continuing pattern of a whole series of inquiries stretching long into the future. Lord Annan has also said—if his inquiry is to proceed this is welcome—that in the first instance he would want the views of viewers and listeners. He said:
A Committee of this kind really will give all viewers and listeners an opportunity to influence the kind of radio and television they will have in the future.
The phrase "viewers and listeners" is interesting. Perhaps in Lord Annan's sub-conscious there is working the influence of the ever-present Mrs. Whitehouse, who seems to appear in our discussions at almost every turn. I shall not go over the ground that we have discussed before concerning Mrs. Whitehouse save to say that I would through you, Mr. Deputy Speaker, urge upon Mrs. Whitehouse and others who feel like her to take advantage of the inquiry. I hope that they will respond to Lord Annan's invitation and that their views will be represented in the inquiry. Even if it did not run its full course, a number of valuable views would have reached a central point. No doubt that would be good for the future of television and radio.
It is also suggested by Lord Annan that standards are to be within the terms of reference of his inquiry. Surely that is not a bad thing. We used the vehicle of a broadcasting council in an amendment in Committee to explore this aspect of the problem. A broadcasting council, like the Press Council, has its followers. We believe that it is best always to build on existing machinery. We talked in Committee about general advisory commit. tees. The Independent Broadcasting Authority's Committee has not been with. out its successes. The British Broadcasting Corporation's committee is a somewhat top-heavy body and its complaints commission is slightly farcical and has not been able to deal with many problems. I hope that the Annan Committee will deal with all these matters. It will not preclude the Minister at the Home Office, or whatever Department is in charge, from taking a continuing interest in these matters.
In the proceedings on another piece of legislation the Minister of State said that journalists and others operating in television had a great responsibility to operate within the existing climate of


public opinion. They cannot always be right, and there should be the apparatus to correct them if they are wrong. It is the Government's responsibility to take a broad view of the matter and keep an eye on the problem. We believe that for Lord Annan or any other inquiry to do its work the listener should have the widest possible choice of material on which to work. If Lord Annan and his committee are to do their job, that wide choice must be maintained.
I wish to put two questions to the Minister. I should like him to go a stage further on two vital matters affecting the future of radio and television. I refer in particular to the future of cable television. There are taking place the valuable experiments which were introduced by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), but they cannot go on indefinitely unless those concerned are told how they are to be financed and how they may develop.
We did not get very far in Committee on that subject. I hope that we can get a bit further this morning. Even if the Minister is unable to say anything positive now, I hope that at least he will give an undertaking that before Parliament rises for the Summer Recess we shall know about the future of this vital experiment. It is not good enough for something to appear on this topic in the Summer Recess. We could well be told now what is to happen.
Another important aspect of the problem is local radio. Lord Annan is to look into the future of local radio. I cannot see how he can do so if the future development of local radio is to be curtailed. We have the 13 stations which the Conservative Government authorised when in office and those stations will all soon be functioning. Some are already functioning and appreciated, but the future hangs in the balance for the next six stations. Has equipment been obtained for those six stations? Perhaps the Minister can confirm that the equipment has been ordered. The stations are Bradford, Wolverhampton, Ipswich, Reading, Portsmouth and Belfast. Are the people of those towns and cities to be denied the enrichment of their lives which local radio could bring?
We need to be given the answer to that tonight. We have asked the question

before. Surely we could easily be told the Government's conclusions on that and on the future of stations in Blackburn, Bournemouth, Brighton, Bristol, Cardiff, Huddersfield and Leeds. The Government, if they have not made positively hostile remarks concerning local private enterprise radio, have not been very friendly towards it. I hope we can now have a cler indication from the Government that they have overcome their prejudice and will allow the stations to continue and develop.
We believe that the future development of radio and television should be a grafting on to the existing framework, not a wholesale demolition. I am interested to see the hon. Member for Derby, North (Mr. Whitehead) present. I do not want to prolong proceedings, and therefore I shall not provoke him too far, but I recall that he said in Committee that he intended—I think I am right—to sign the majority report of the Annan Committee. He said that he intended to be in that position. He was what I might describe as the rolling chairman of the Wedgwood Benn committee—

Mr. Phillip Whitehead: No.

Mr. Cooke: It seems that he was at least a chairman of the committee which produced the Wedgwood Benn document on the media.

Mr. Whitehead: Wrong again.

Mr. Cooke: The hon. Gentleman will be able to put me right, but he was a chairman of that committee—

Mr. Whitehead: Wrong again.

Mr. Cooke: The hon. Gentleman had a great deal to do with the document produced by that committee, and it is on the record that he has claimed credit for it. There is no doubt that the hon. Gentleman intends that the Annan Committee should adopt a fairly substantial part of that document and he might even do his best to get the Annan Committee to adopt the whole document.
It is against that background that we pose our questions. Do the Government believe that whole system should be torn up or are they prepared to proceed along the lines we have followed of careful evolution based upon existing institutions? I


hope that the Minister will give an indication this evening that the Annan Committee will not be used as an excuse for doing nothing and will not be a device for curtailing public choice, which would be even worse. That could be a real danger.
It would be possible for the Government to use the Annan Committee as a device to do nothing and so let cable television and local radio wither away. I hope that on this occasion the Minister will be a little more forthcoming.

1.54 a.m.

Mr. Phillip Whitehead: I do not wish to detain the House long at this late hour. We have seen in an earlier part of our proceedings tonight what can be done by unnecessary procrastination which can keep many people, including many servants of the House, here for many hours longer than they perhaps wish.
I found the somewhat laborious attempt by the hon. Member for Bristol, West (Mr. Cooke) to breathe yet more life into the corpse of the Conservative Party posture on broadcasting more unconvincing than usual. It is not true—here I speak in a personal capacity, not as a member of the Annan Committee—to say that that committee was soliciting purely the views of Mrs. Mary Whitehouse when Lord Annan asked viewers and listeners to give the committee their views. Viewers and listeners are not placed in capital letters. They are taken in the general sense, and it is within the context of the general view of information about public attitude to broadcasting that the Annan Committee will shape its findings.
I have to say yet again to the hon. Member for Bristol, West that when that moment comes and the Annan Committee is deliberating, all the evidence that it receives, written and oral, will be considered with equal force. That goes for the document "People and the Media" as for everything else.
When the hon. Gentleman erroneously says that I was chairman of the committee, knowing that the whole document should be absorbed by the committee, he merely proves to the rather thinly-attended House that he has not read it, because more than two-thirds of the document, in terms of column inches,

does not relate to broadcasting. It will be considered along with other things that are connected with broadcasting.
I want to follow the hon. Gentleman's probing remarks about cable television and local radio. He is right in saying, though he says it for the wrong reasons, that we should have a rather more clear indication than we have had hitherto of the Government's intentions on the future of commercial radio. My hon. Friend the Minister said on Second Reading that this was under active consideration. As I understood it, the matter was under active consideration at a high level in the Government.
I do not believe that we should progress beyond the situation in which we have 12 commercial radio stations and a thirteenth, the London Broadcasting Company, which would have to be altered in some way, if as a result of the diminution of the potential commercial system from 60 stations to 12—a reduction of four-fifths—its potential base as calculated by the IBA became unviable.
What we are looking for from my hon. Friend the Minister is some indication that whatever may have been spent on investigations or equipment in the outer reaches of the six next stations down the line where tenders might be requested, and, indeed, in all those other areas such as Huddersfield and Leeds where the population are pining for the choice of commercial radio, we can take it that the present commercial radio experiment—because that is what it is, on a par with the cable television experiment—will for the moment and for the purposes of the consideration of the Annan Committee be confined to the 12 stations plus a thirteenth—the spectre at the feast, the London Broadcasting Company—in whatever form all new stations in London should afterwards take.
On cable television, I say again that I too acknowledge that the present five experiments cannot go on indefinitely, though they are all providing information of value. One or two have shown that they could provide more in the way of programmes of merit and genuine local origination than they have been permitted to do within the narrow limits of the experiment.
Given what we know about the rapid expansion of cable television in other


countries and the dynamic economic and social considerations that will impel it onwards in this country, it is fair to say that the cable television experiment should not be frozen at the existing rather low level of activity until 1979. It would be useful—again I am speaking in a personal capacity—if more evidence from a greater variety of sources could be presented to the Annan Committee about the functions of cable television.
2.0 a.m.
We on this side of the House hope to hear that the profligate expansion of commercial radio will now be controlled, if not halted, and that the rather niggardly expansion of cable television will at least be so strengthened and sustained that we have something like a nation-wide picture of varying experiments in cable television and relay systems to consider when the whole future of this valuable new means of transmission of broadcasting is further examined by 1979.
I have every hope that in the next few years we shall be able to reach a broad measure of consensus between the parties and between the various interested groups as to which way broadcasting should develop. For that to be possible we have to be able to take into account all the possible means of experimentation in all the available technologies now at the command of broadcasting. I look forward, at what is possibly this early stage of the debate, to hearing what my hon. Friend has to say on these points in particular.

The Minister of State, Home Office (Mr. Alexander W. Lyon): At this hour I do not suppose that the House wishes me to go into great detail about the problem of 1981 as against 1979. Indeed, I do not remember the hon. Member for Bristol, West (Mr. Cooke) even referring to the question of the date, which is the basis of the Amendment.

Mr. Robert Cooke: I said that the amendment was to be used as a vehicle for us to ask a number of questions. I have asked the questions and shall be grateful if the Minister will give us the answers.

Mr. Lyon: The hon. Member is unusually touchy at this time of night. I

was only saying that he had not spoken about his amendment.
On that basis the hon. Member asked a number of questions. He suggests that there was something in a speech I made on the Cinematograph and Indecent Displays Bill which is in some way contradicted by something I have said since. All I said on that occasion—the hon. Member will see he has got it wrong when he reads it—was that television producers in particular ought to work within the climate of opinion current at the time and ought to have some kind of respect for it.
The hon. Member takes that to mean that the Government ought to have some kind of interest in what television producers do. I specifically deny that that was the intent of that speech. It has been the policy of Governments of both complexions throughout the years that we do not have any control, and do not seek to have any control, over broadcasting content. The point I was making in that speech was that although we rightly eschewed that responsibility, nevertheless television producers had a responsibility to the community at large and it was a responsibility which lay with broadcasters and not with the Government.
I do not wish to take any kind of control over broadcasting content. The interesting thing, despite all the criticism that has been made by the Opposition of the Transport House document on broadcasting, is that this is also the theme of that document, which the Opposition attack as some kind of attempt to take over the processes of broadcasting on behalf of the State. Far from it. The whole of the document is replete with the kind of statement I have been making, namely that, although there is a responsibility upon broadcasters, that responsibility should not be exercised by the Government. I take that view too. What the document says—and I agree—is that if responsibility is to be self-imposed in broadcasting it has to be imposed within the context of law, and law is necessary to limit the freedom of action of broadcasters—Press men—in the interests of others, namely the general public and the individuals affected by broadcasting.
The document sets out the balance that should be held in terms not very


different from those used by my right hon. Friend the Prime Minister in our recent debate on the Press. He said that four current committees were considering aspects of the law which impinged upon broadcasting and the Press, which gave the Government a unique opportunity of drawing the line between an increase in the freedom of information for the media and a decrease in the freedom of information about private lives in the media.
That remark could not be more apposite than it is today. In The Times this morning there is an account of a report by the Press Council which suggests that there is a threat to the freedom of the Press from the introduction of a law of privacy which might impinge upon investigative journalism, and on the middle page there is a disgusting article which is a nauseating intrusion into the privacy of a person in public life setting out details of her life which are no concern of the public at large and should never have been printed. That shows the imbalance between the power which is given to the Press and to the media generally and their responsibility to individuals, which they have failed to acknowledge and in respect of which the law may be required to redraw the balance.
There is a distinction between the law holding the balance between broadcasters and the Press against individuals and the Government dictating to either broadcasters or the Press what they should or should not do. In the case of the law the distinction is that the judge or 12 people on the jury hold a balance and that it is not the Government who, acting through their executive power, seek to impose their will upon broadcasters. The distinction, I hope, is clear. It is a distinction which I draw in all respects in relation to programming by broadcasters.
The hon. Member for Bristol, West asked me about cable television and local radio. I am not in a position tonight to say much more than I said in the Second Reading debate, save that I give him the assurance that there will be statements upon these matters before the Summer Recess—that is to say, not in the very distant future. I need not speculate further about what those statements might include. I said all I could say about the matter in the Second Reading debate, but I recognise that it is of some urgency and I hope that we shall be able

to satisfy the hon. Gentleman before the end of the Session.

Mr. Robert Cooke: Does the hon. Gentleman mean that there will be a statement or a Written Answer on Friday? When he says "statement", does he mean a statement?

Mr. Lyon: With the pressure on Government time between now and the end of the Session I cannot say that a full-blown oral statement in the House will be possible. I doubt whether the House would accept it. It may have to be in the form of a Written Answer. I am indicating to the hon. Gentleman that there will be an expression of the Government's views on these matters before the end of the Session.

Mr. Cooke: We have now heard that it might be a Written Answer. I do not think that would satisfy the Opposition unless it is given at such a time that it would be possible for hon. Members to raise the matter before we rise for the recess. Could not a Written Answer be brought forward to enable the matter to be raised on the Floor of the House? A Written Answer at a late stage which would preclude discussion would hardly be the statement which the hon. Gentleman suggested we should get.

Mr. Lyon: The hon. Gentleman has had his reply. I do not propose to say any more than I have said. The expression "statement" in a parliamentary sense is a technical term. I did not intend it to be taken as such. There will be an expression of the Government's view before the end of the Session, and the hon. Gentleman must do with it then as he wishes.

Mr. Jonathan Aitken: The Minister of State has made an extraordinary speech in certain respects. As my hon. Friend the Member for Bristol, West (Mr. Cooke) has indicated, the purpose of the amendment was to probe the Government's intentions. We had considerable difficulty in discovering them in Committee, largely because of the boxing and coxing of Ministers, which some of us thought showed discourtesy to the Committee and to the IBA.

Mr. Lyon: The Opposition spokesman on broadcasting, the right hon. Member for Bournemouth, West (Sir J. Eden),


was not on the Committee. I do not see why the fact that I was not on it either should be a cause of criticism.

Mr. Aitken: I was not making a point about the Opposition spokesman, but it is extraordinary that three different Ministers should have handled three different stages of the Bill.
Far from probing anything with the amendment, we have come up against a brick wall. It is not clear whether we are to get a statement or a Written Answer. It is clear that the Labour Party, which talks about open government is a closed book as regards disclosure on the important subjects of cable television and local radio at this stage. I hope that the Government will change their attitude in the next few days.
The hon. Member for Derby, North (Mr. Whitehead) sneered at my hon. Friend the Member for Bristol, West for breathing life into the corpse of the Conservative Party's policy on broadcasting. As in many other things, that policy is to conserve things, and while on the whole we have many criticisms of the existing broadcasting institutions we do not want to see the IBA or the BBC torn down.
One of the reasons for the considerable disquiet about the Bill is our fear that in extending the life of the IBA for only three years we shall be seriously reducing its effectiveness, because we shall be removing from it the sanction to take away the licence of a programme company. If it is known that the authority has only three more years of life, one could not ask another contracting company to come in for only three years.

Mr. Whitehead: The hon Gentleman is again showing that he is totally unaware of the provisions of the Television Act. The authority has power if it feels it necessary to take over programme making for itself. It would be possible to withdraw a contract from a company even if there were only six months of the contract to run, let alone three years.

Mr. Aitken: The hon. Gentleman is really living in a fantasy world if he thinks that Lord Aylestone and his colleagues on the authority could suddenly step in and make programmes. The hon. Gentleman is talking nonsense. He said

on Second Reading that he thought it was necessary for the Authority to have dentures and to bite and he was worried that in a three-year term the whole powers of the Authority would be allowed to coast downhill. I gave the exact reference in Committee. I do not think I am paraphrasing his remarks inaccurately.
2.15 a.m.
The Opposition were worried that by extending the life of the IBA for only three years we would make it not the Independent Broadcasting Authority but the incompetent broadcasting authority because we had removed the one sanction. The reason for our concern was our fear that under the guise of the Annan Committee, which might end up in simply a mish-mash of minority reports, there could be heavy pressure to introduce some of the remarkable proposals in the Labour Party's document "The People and the Media".
The main proposal in that document is to scrap the IBA and the BBC and to bring in a public broadcasting commission and two completely new channels, We would regard such proposals as extremely unwelcome, to put it mildly, and we believe that we are right to press the Government for their intentions. As we have received no assurances, I can only say on behalf of the Opposition that we remain very worried and anxious about the Government's proposals.

Mr. Alexander W. Lyon: Is the hon. Gentleman serious? We have appointed the Annan Committee, with the prospect of two and a half year's work, and it will then report on the very issue about which he asks us to take a view. He should know from the Second Reading debate that the Transport House document will be simply a piece of evidence for the Annan Committee to consider. At the end we shall consider the committee's recommendations about it and about all the other evidence that it gets. Clearly the Government could not have a view today about what they will do.

Mr. Aitken: The Minister keeps saying that the Annan Committee will treat the document "The People and the Media" only as a piece of evidence. However, we have seen already how minority reports can shape the future


of broadcasting more than a majority report can. Independant television came into existence thanks only to a minority report from my right hon. and learned Friend the Member for Wirral (Mr. Lloyd), now Mr. Speaker, who recommended the proposals which brought into existence the ITA, as it was then known, against the majority recommendations.
It is more than reasonably possible to suppose the members of the Annan Committee, composed of as many diverse and loquacious people as are appointed to it, disagreeing among themselves and producing a number of minority reports, some of which might closely follow the proposals in "The People and the Media". One of the authors of that document, the hon. Member for Derby, North, is capable of submitting strong proposals along similar lines. There is a genuine fear that the Annan Committee may break up into a mish-mash of minority reports and act as a Trojan horse for the proposals in "The People and the Media".
The Minister brushed aside the document, describing it as a harmless little affair rather like the Prime Minister's ideas on the Press. Having sat through our debate on the Press, I cannot see any similarity between the proposals in "The People and the Media" and the Prime Minister's ideas on the Press.
What is more, I cannot see what relevance there was to this debate in the Minister's extraordinary attack on The Times. He seemed to think that the law was needed to redress the balance because a serious invasion of privacy occurred in an article about Lady Falkender publised in The Times today. I read the article only a few minutes ago. Some of the more waspish comments in The Times were more than equalled, if not excelled, in the warpish comments made in Lady Falkender's own book on the subject of the Civil Service. I do not see how invasions of privacy—

Mr. Deputy Speaker (Mr. George Thomas): Order. If at all possible, we try to avoid discussing Members of another place.

Mr. Aitken: With respect, Mr. Deputy Speaker, the subject was raised by the

Minister. I thought that in the interests of The Times and the freedom of the Press some rebuff was necessary and was called for.
We are dissatisfied with the Minister's approach tonight. We have asked some reasonable questions about the, future of broadcasting and we have received no replies whatever. The sinister proposals contained in "The People and the Media" the hon. Gentleman insists on dismissing as a mere nothing. We fear that these may lead to a drastic take-over of our existing good broadcasting organisations which we would like to conserve.

Mr. Whitehead: rose—

Mr. Deputy Speaker: Order. The hon. Gentleman has exhausted his right to speak.

Mr. Robert Cooke: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

MERCHANT SHIPPING BILL [Lords]

Not amended (in the Standing Committee), considered.

Clause 24

CITATION, COMMENCEMENT, REPEALS AND EXTENT

Amendment made: In page 22, line 42, leave out subsection (6).—[Mr. Clinton Davis.]

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, with an amendment.

NORTHERN IRELAND (YOUNG PERSONS) BILL [Lords]

Not amended (in the Standing Committee), considered.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed, without amendment.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]

COASTAL SEARCH AND RESCUE

2.22 a.m.

Mr. Jonathan Aitken: Despite the lateness of the hour, I am grateful for this opportunity to raise the subject of Coastguard search and rescue services in Thanet and East Kent.
Specifically, I wish to ask the Government whether they will reconsider their decision to disband a civilian Coastguard helicopter search and rescue unit which has been operating both successfully and economically in East Kent and Essex for the last five years and to replace it from September with a considerably more expensive Royal Air Force unit of helicopters which will be doing the same search and rescue services from the same airfield.
I believe that this decision is mad. It is significant and is worthy of the attention of the House because it not only raises points of considerable local concern but it highlights two nationally important issues—namely, an extraordinary new development in Britain's defence strategy and a serious waste of the taxpayers' money.
May I put this whole matter in perspective by giving some brief explanatory background? My constituency contains an RAF base—RAF Manston—which is largely used as an emergency diversionary airfield. Up to 1969 Manston was also used as a base for an RAF helicopter unit which carried out search and rescue duties in the East Kent area. In 1969,

however, the then Government decided that there was no military need for RAF helicopters to be used at Manston, and they were withdrawn.
That withdrawal left a dangerous vacuum. A whole area of the Kent coast was without a rescue service. However, the vacuum was admirably filled by the Coastguard service working in conjunction with Bristow Helicopters Limited a private company under contract to the Department of Trade.
In passing I should like to say that no words of praise can be too high for the service that has been provided by Bristow since 1969. It is agreed on all sides that the company has done an excellent job in its rescue operations. It has consistently achieved a first-class response time, it has been winner of the Coastguard Shield and it has been admired for its dedication to duty throughout the area.
It is also worth mentioning that Bristow has achieved not only excellence but economy. Its unit consists of only 12 men, most of them ex-RAF personnel, using Whirlwind helicopters on a contract which cost the taxpayer £180,000 in the current year—

Mr. Peter Rees: £184,000

Mr. Aitken: Even with the extra £4,000, that is very good value for money.
In view of the excellent and economic service provided, it is no surprise that East Kent today should be up in arms at the shabby treatment that has been meted out to Bristow by the Department of Trade in deciding to terminate its contract. Since the expulsion of Bristow was announced, there has been a wave of protest throughout the region from bodies as diverse as the Ramsgate Trades Union Council, the Sandwich Yacht Club and the Margate Royal National Lifeboat Institution. Several thousand cars are now bearing the window-sticker with the slogan "Rescue the Rescuers" and a petition has been organised in the neighbourhood which has attracted over 20,000 signatures in less than three weeks.
The decision that has triggered off all this strong local feeling, which cuts across all political lines, has arisen because the Ministry of Defence has suddenly decided that RAF helicopters are needed in East


Kent. This is a most significant development, if only because it is the only recorded example of the present Government actually increasing defence spending anywhere at any time, but it is most regrettable that this munificence should, as I shall show, be such a profligate waste of the taxpayers' money.
The basic reason why the economical Bristow civilian Coastguard helicopter service is being kicked out and expensive RAF helicopters are being brought in is an alleged "military need". It must be stressed that this so-called military need is the brainchild of the present Government. As recently as 18th May last year, the then Under-Secretary of State for Defence for the Royal Air Force wrote to my hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies), saying that there was
no direct Service requirement to locate an RAF helicopter unit at Manston".
However, we are now told that since Labour came to power there is suddenly a Service requirement and a military need for RAF helicopters at Manston. Naturally, some of us have been sceptical enough to press for details of this new military need. After some requests I eventually received an amazing definition of the military need from the present Under-Secretary of State for Defence for the Royal Air Force.
This Minister wrote to me a letter dated 11th June saying that there were "good military reasons" for bringing RAF helicopters to Manston. The Minister's letter went on to say:
The present strategy of flexible response places increased emphasis upon the flow of reinforcements to Europe in times of tension and much of this movement would take place across the Channel. It is because of this that the Air Force Board has taken the view that we need a military SAR unit in the area".
This letter was indeed a startling revelation. We new that the Foreign Secretary had trodden on a few European toes in the Common Market, but we had no idea that this diplomatic activity was causing his colleagues in the Ministry of Defence to make plans for the invasion of France.
This military fantasy of moving invasion troop reinforcements across the Channel is made even more ridiculous by the idea that two RAF Wessex helicopters will somehow play a significant

part in the invasion. The whole concept is an imaginative and creative scenario more suitable for the pop songs of Mr. Elton John or the paintings of Mr. Augustus John than the ministerial pronouncements of Mr. Brynmor John. Sensible people will have great difficulty in taking the hon. Gentleman seriously on this aspect of his policy when he defines the military need for these helicopters.
Moreover, there is a Catch-22 situation here. Ministers have attempted to reassure me and my hon. and learned Friend the Member for Dover and Deal (Mr. Rees), whom I am glad to see here, that the RAF helicopters will be no less efficient in their civilian rescue operations than the present service from Bristow undoubtedly has been. However, if the military need is as menacing as the Minister would have us believe, the RAF helicopters will surely be on occasion too busy to make civilian rescues. This would be a matter of great concern if the military need genuinely existed. I suspect, however, that the only true military need is to find a home for the RAF helicopters which we now know are being pulled out of Singapore. We have all heard of jobs for the boys; now it is a case of jobs for the helicopters.
I said earlier that if and when the RAF Wessex helicopters begin operating at Manston there will be a profligate waste of taxpayers money. This allegation has been denied by the Under-Secretary of State for Defence for the Royal Air Force who said in answer to a Parliamentary Question from me that the RAF service would cost a mere £28,000 more than the existing Bristow contract.
However, I fear that the hon. Gentleman's mathematics on this matter are so inaccurate as to be seriously misleading when one considers the following factors. Bristow employs 12 men on their unit whereas the RAF will be employing 31 men; the per hour operating costs of the RAF Wessex helicopters are more than twice as expensive as the Whirlwind helicopters as present operated by Bristow; and the depreciation costs of Wessex helicopters at present operated by Bristow are two and a half times more expensive than the depreciation of Whirlwind helicopters.
In short, there is no way in which the taxpayer will not be paying at least twice


as much money for the RAF service for the same job that is now being done at maximum efficiency by Bristow for £180,000. Indeed, taking all the relevant factors into account I calculate that the bill for the RAF service will be not far short of £500,000 a year whereas Bristow cost the nation only £180,000 a year. I simply cannot see that there is any justification for this vast and unnecessary extra expenditure.
I should like to make it clear that what I have said in this debate is in no way a criticism of the RAF pilots or their flying standards. If the RAF helicopters come to Manston I am sure they will do an excellent job, although it will be virtually impossible for them to better the fine record of Bristow. However, I urge the Minister not to station these expensive heavy-lift Wessex helicopters of the RAF in the one spot in the United Kingdom that least requires them. Wessex helicopters are needed at bases like Lossimouth where there are long ranges to cover. They are unnecessary in the Channel area which has the shortest distances to cover.
Finally, there is above all the fear that these RAF helicopters will again be withdrawn for political or strategic reasons as they were in 1969. If there were to be another sudden RAF withdrawal it would be difficult, if not impossible, to find another civilian helicopter service prepared to come in and do the job that Bristow has done, because no civilian unit will want to be vulnerable again to sudden cancellation of contracts, on the principle of "Once bitten, twice shy".
Therefore, in the interests of all the yachtsmen, swimmers, and shipping traffic of the Channel I urge the Minister to reconsider his decision and to leave the excellent helicopter service in the situation where it now is.

2.33 a.m.

Mr. Peter Rees: rose—

Mr. Deputy Speaker (Mr. George Thomas): Has the hon. and learned Member reached an agreement with the hon. Member for Thanet, East (Mr. Aitken) and with the Minister?

Mr. Peter Rees: Yes, Mr. Deputy Speaker.

Mr. Deputy Speaker: Mr. Rees.

Mr. Peter Rees: May I congratulate my hon. Friend on choosing this subject for debate, and may I express my gratitude for the opportunity to take part?
My hon. Friend may appear to have raised a small matter, but it is of intense concern not only to his constituents but to mine and to all who make use of the Channel, including the constituents of my hon. Friend the Member for Harwich (Mr. Ridsdale), who would, if time had permitted have taken part in the debate.
As my hon. Friend has said, the present helicopter rescue service is good, cheap and based by contract on free enterprise. During the years 1970 to 1973 502 sorties have been flown by the present helicopters, 159 people have been rescued and, on a sadder note, 16 bodies have been recovered.
In that situation, one asks why there should be a change. Does the Minister suppose that the new arrangements would be cheaper or more effective? Nothing I want to say and nothing my hon. Friend has said is intended as in any way a reflection on the efficiency of the RAF, and one recognises that the Wessex has a wider range than the present Whirlwinds, but there must be reservations in the minds of anyone who applies himself to this.
The service to be provided by the RAF must be subject to overriding defence requirements. There will be a lack of continuity of personnel involved since, being Service personnel, they will be there only for the normal defence tour of duty of about two to two and a half years, and, additionally, there will be the greater cost of the proposed scheme. Even without depreciation and maintenance and perhaps running costs, the overall cost is likely to be in excess of £200,000 compared with the present contract figure of £184,000. In that situation I do not believe that what the Minister proposes is a good bargain for the people of the east coast of Kent. I have no doubt that the question has been closely argued between the various Departments. I suspect, however that the Coastguard Service, for the views of which I have a great respect, has been overborne in this case by the Ministry of Defence.
I hope, therefore that the Minister has preserved an open mind and will respond to the anxieties of my constituents and to the points which I and my hon. Friend have made in the debate.

2.35 a.m.

The Under-Secretary of State for Trade (Mr. Clinton Davis): I am glad that this subject has been raised, albeit at this late hour, and I am grateful for the remarks of the hon. and learned Member for Dover and Deal (Mr. Rees), which were somewhat more temperate than those of the hon. Member for Thanet, East (Mr. Aitken). I am wholly aware of the public concern in their constituencies about this situation. The debate gives me the opportunity to try to allay that concern and to refute some of the allegations and misconceptions which have been bruited about concerning the replacement of Bristow by the Royal Air Force detachment.
It has been suggested that Bristow has suffered from shabby treatment. I shall deal with that suggestion shortly. I want to remind the House and the constituents of the hon. Member for Thanet, East that this matter has been the subject of profound consideration not only by the present Government but by the previous Government. I have little reason to doubt that if a Conservative Government were in office at present the Bristow contract would not have been renewed.
However, before coming to that matter, it is appropriate for me to pay tribute to the work which has been done by Bristow, which was recognised by the well-merited award of the Coastguard Rescue Shield in 1972. Certainly I would not for a moment wish to detract from the value of that service over the period in which Bristow has pursued the work under its contractual obligations. But, equally, it would be an injustice if the House were to be left in any doubt about the excellent service given over many years by the search and rescue detachments of the Royal Air Force. Although established primarily in support of "military requirements"—a phrase which apparently the hon. Gentleman saw fit to deride—they have provided over many years, as indeed they still do, a service of almost incalcuable benefit in the saving of civilian life.
In the past 18 months alone, Royal Air Force search and rescue helicopters

from bases in the United Kingdom have attended a total of 643 incidents involving civilians, in the course of which no fewer than 440 individuals have been assisted. Inshore support has been provided where appropriate by RAF marine craft units, while long-range Nimrod aircraft have carried out a considerable number of search missions in support of ships and aircraft further from our coasts. I am happy, therefore, to pay my tribute to the high standards of skill and devotion with which these tasks are invariably carried out. I am confident that the detachment soon to be re-established at Manston will measure up to these same high standards.
It is well to remember that it is only at Manston and Aberdeen that search and rescue services by helicopter are provided by organisations other than the Royal Air Force and the Royal Navy. This year the Bristow contract expired and the Department would have been obliged to go out to tender in order to continue a civil search and rescue helicopter service from Manston. There is no certainty—although I am bound to admit that there is a likelihood—that Bristow would have got that contract. I do not know what price Bristow would have tendered—save that I assume that it would have been in excess of £184,000, which was the sum paid for the last full year, 1973. We are not talking about the current year.
We learned of the Ministry of Defence considerations to re-establish a detachment at Manston. As I have stated, the previous Government, too, had joined in consultations about the future cover at Manston. We asked for and were given certain assurances by the Ministry of Defence, and it is right that I should refer to those assurances.
First, the RAF helicopters would be available for civilian search and rescue incidents as are other military search and rescue helicopters stationed around our coasts. Secondly, if there were a clash of incidents, as could happen even with a civilian service, the RAF was better equipped to deal with the situation because it had two helicopters immediately available rather than the ones as at present. Thirdly, the close liason with the Coastguard would be maintained by the RAF detachment. Fourthly, the Wessex helicopters of the RAF would be


fitted with communications equipment providing the same links with the Coastguard and the other rescue organisations as the present civilian unit.
The Minister of Defence has given these assurances, but there were a number of additional and, I believe, apparent reasons for preferring the RAF service.
First, the Wessex helicopters are bigger and better than the Whirlwind. They can travel faster to the search area and stay there longer. They have two engines rather than one. They have a much better lifting capacity. This is not a theoretical consideration. It is based on the experience of the RAF, which operates both Wessex and Whirlwind helicopters. But most persuasive of all, as I have indicated, is that we were to be provided with two helicopters positioned at Manston whereas there is now only one with a back-up service at Redhill. I can claim, therefore, that the service to be provided by the RAF will be superior to the service presently provided.
I come now to one other matter before I deal with the arguments which have been adduced by the hon. Member against the new concept. I resent the insinuation which he made time and time again, and which seems to have been part of a publicity campaign, that the motives of the Department of Trade, in conjunction with the Ministry of Defence, are fit to be impugned on this subject. I think that those remarks were ill-judged, but perhaps they were not the conception of the hon. Member Mr. Bristow, who is perhaps behind these insinuations, asked—

Mr. Aitken: In all fairness to Mr. Bristow, I must explain that I have had no communication with him throughout this entire matter, and the only people who have intervened with me are the pilots who are my constituents.

Mr. Davis: Mr. Bristow demanded to see me without the presence of my civil servants. It was not a request I was prepared to agree. I told him that I was prepared to see him on the normal, courteous, civilised terms on which I would meet anybody who wanted to see me, and I think that any Minister would take the same view. Mr. Bristow chose not to accept the invitation. I hope that I have not done the hon. Member an

injustice. I thought that I had qualified my remarks, but I cannot believe that Mr. Bristow played no part in the campaign now going on.
The hon. Member says that the RAF service will cost twice as much. How he comes to that view I do not begin to understand.

Mr. Aitken: Two helicopters.

Mr. Davis: But the Bristow service is supposed to provide two helicopters, one with a back-up service at Redhill. Surely the hon. Member in seeking to obtain a better and more effective search and rescue service would prefer to have two helicopters operating rather than one. I do not believe that the RAF service will be more expensive for the taxpayer. In 1973 Bristow cost £184,000. The RAF detachment's costs, of course, will fall to be dealt with by the Ministry of Defence, but I do not believe that it is possible to make a direct comparison of cost between the RAF and Bristow. The calculations are quite different. The Defence Department's estimated cost is £202,000 in a full year. That is based on the full pay and allowances for the 31 men at Manston and Odiham—the support base—together with the running costs, including fuel and lubricants and all spares, of the two Wessex helicopters and the supporting Land Rover vehicle. No costs are included for training or for non-effective benefits such as pensions. No allowance is made for depreciation. The aircraft concerned, as is standard RAF practice, are maintained for as long as they are in use at a 100 per cent. level of efficiency, virtually equivalent to new. That is the normal RAF method of calculating direct costs.
It is important to stress that the Defence Department's decision to incur this cost, despite the proposed defence cuts, is an indication of the importance it attaches to the unit for defence purposes. The military requirement has already been described to the hon. Gentleman in the House and in correspondence. It is a little presumptuous of the hon. Gentleman to believe that he knows all the answers to defence matters in this field. The Defence Department considers that there is a need which stems from the amount and nature of the military flying expected to take place in the future in peace time in the southern part of the


North Sea and English Channel and the pattern of military aircraft movement across the North Sea and Channel in times of tension. This is not a novel conception; the previous Government were also aware of it. I can see no justification in those circumstances for operating a parallel civilian service alongside the RAF.
The hon. Gentleman referred to the possible withdrawal of the RAF. I cannot give a categorical assurance that the RAF will never leave Manston again, as in the situation that arose in 1969. It was not a question of saying then that there was no need for a helicopter service at Manston. It was a matter of priorities. The Defence Department has now said that the unit is to be regarded as a high priority unit, and that it will remain within those terms at Manston. One cannot give a cast-iron guarantee, but can private enterprise always assure that there will be a presence? There have been one or two examples recently where private enterprise has not been able to fulfil that sort of rôle in other fields.
I believe that the assurance we have been given—that if, in the unlikely event of an emergency arising, the RAF were bound to withdraw, it would provide us with sufficient notice to enable a satisfactory alternative service to be put into operation—is made in good faith and is reasonably acceptable.
For the reasons I have adduced, I believe that this decision is justified beyond all reasonable doubt. I do not believe that it is right to suggest that the RAF will provide a poorer service. Indeed, for the reasons I have already explained—having two aircraft available, having better aircraft available—I believe that the service will be superior.
It is suggested that perhaps the RAF does not at present have the same relationship with the Coastguard and does not have the same knowledge of this part of the coast. I assure the hon. Gentleman and his constituents that already the training of the new crew is in hand. It is the determination of the RAF detachment to maintain the strongest possible relationship with the Coastguard, and I have no reason to believe that this will not be accomplished, with the wealth of experience that the RAF has at its command throughout the whole of the United Kingdom.
Therefore, I believe that there are compelling reasons for this new service to operate. I have heard nothing in the debate which would lead me to reconsider the decision that has been made after the most clear and profound determination by the two Departments involved and by the Ministers.

Question put and agreed to.

Adjourned accordingly at ten minutes to Three o'clock a.m.

Second Reading Committee

ROAD TRAFFIC BILL [Lords]

The Committee consisted of the following Members:


Sir Alfred Broughton(Chairman)


Awdry, Mr. Daniel (Chippenham)
Horam, Mr. John (Gateshead, West)


Bradford, Mr. Robert J. (Belfast, South)
Howell, Mr. Ralph (Norfolk, North)


Callaghan, Mr. Jim (Middleton and Prestwich)
Huckfield, Mr. Leslie (Nuneaton)



Hughes, Mr. Roy (Newport)


Carter-Jones, Mr. Lewis (Eccles)
Le Marchant, Mr. Spencer (High Peak)


Clark, Mr. Alan (Plymouth, Sutton)
Lester, Mrs. Jill (Beeston)


Cohen, Mr. Stanley (Leeds, South-East)
Mulley, Mr. Frederick (Minister for Transport)


Dunnett, Mr. Jack (Nottingham, East)



Durant, Mr. Tony (Reading, North)
Wise, Mrs. Audrey (Coventry, South-West)


Finsberg, Mr. Geoffrey (Hampstead)



Fox, Mr. Marcus (Shipley)



Fry, Mr. Peter (Wellingborough)
Miss A. Milner-Barry, Committee Clerk.


Golding, Mr. John (Newcastle-under-Lyme)

10.30 a.m.

The Minister for Transport (Mr. Frederick Mulley): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the Road Traffic Bill [Lords] ought to be read a Second time.
The Bill makes a variety of important improvements to road traffic law and has implications for the continuing programme to combat road casualties, for the effective administration of the law, especially in the matter of parking in the cities, for the environment and the consumer. I think all hon. Members know that this legislation has had a chequered history. A similar measure was introduced in another Place in the last Parliament and received a Second Reading

in the Commons just before the Dissolution. On that occasion, I welcomed the Bill on behalf of the Opposition but drew attention to parts of it which seemed to me to be misplaced because full consultation and agreement had not been reached with the interests concerned.
I am glad now to try to push on with this measure, which is extremely useful and I, together with my hon. Friend the Minister of State. Home Office, whose Department is principally concerned with some parts of the Bill, have had representations and met people about the Bill's proposals.
To avoid delaying the Bill unduly, it was introduced again in another place while some of these matters were under discussion, and, for this reason, clauses


affecting drivers and operators of heavy goods and public service vehicles, including clauses on bus licensing, were not included in the Bill as presented. During the Bill's passage in another place, clauses on these subjects were inserted into the Bill and I shall indicate the Government's attitude to them when I outline its provisions.
Before coming to the provisions which have been added, I should briefly mention an important clause that was taken out of the Bill in another place—namely, an enabling clause to permit the Minister to require the compulsory wearing of seat belts. I should like to make it absolutely clear that, in normal circumstances, I would wish to ask the House to reinsert that clause, but I think we must be realistic and, in the short time now available to us—I hope before the recess—and having regard to the fact that the Committee stage of the Bill is due to be taken on a Friday, it would be absolutely wrong to ask the House of Commons to come to a view about seat belts on a Friday when we all know that it is the only day that many of us have to make engagements in our constituencies and, therefore, all hon. Members who might wish to take part in such a debate could not be expected to be present. I think, too, that the public generally would take a very poor view of an important matter of this sort being determined at the end of a parliamentary session with probably less than a full attendance of hon. Members.
In order to facilitate the passage of the measure, therefore, I do not propose to put down an amendment on seat belts on this occasion, although I must say that I found it extremely odd that another place, having inserted the clause in the previous Bill, on this occasion, after I had accepted their view and put it in my Bill, took it out. But that is something that we have to live with, and I think that the House generally would wish that that matter should perhaps be dealt with separately in the next parliamentary session. That, ceartainly, will be my intention if I have any influence in these matters.
I now come to the provisions in the Bill as received from another place. The important Clauses 1 to 5 and Schedule 1 are in substance the same as in the pre-

vious administration's Bill, which received its Second Reading in the House less than six months ago. The clauses are designed to require that the registered owner of a vehicle, in addition to the driver, should be liable for certain minor stationary road traffic offences when fixed penalties are not paid, and for unpaid excess parking charges.
Since 1960, when the fixed penalty procedure came in, there has been great concern about the large number of such charges that have not been paid. For example, in 1972 it is estimated that of the 23 million fixed penalty notices issued in England and Wales, payment was made for only two-thirds. The position is getting progressively worse. In the last figures which we have, for 1973, of just under 2 million fixed penalty notices in the Metropolitan Police district, there were over 600,000 cases—an increase of more. than a quarter of a million over the previous years—in which the Metropolitan Police were unable to prosecute within the six months that the law allows.

Mr. Geoffrey Finsberg: Could the Minister tell us later how many from that figure could not be served or collected because the owners claimed diplomatic immunity? My understanding is that they would still be able to get away with it.

Mr. Mulley: I have nothing like that kind of detailed information. I could probably obtain it, but I do not think that there are 600,000 possible diplomatic cases.
As well as bringing the law into disrepute, a great deal of police time is taken up at a time when all of us want the police engaged in more constructive duties. It is widely accepted by the Geater London Council, and a number of other authorities which are trying to restrain traffic in our great cities, that unless they have some way of dealing with the problem it is quite impossible for them to get on.
I stress that the owner's liability will arise only in matters of a fixed penalty or excess charge notice. It will not apply to other cases, such as moving traffic offences, but only where, in a sense, the normal processes of law have been short-circuited by the fixed penalty procedure that was introduced in 1960.
If I am speaking quickly it is not that I wish to curtail the discussion but, on the contrary, it is to leave plenty of time for members of the Committee to deal with points that are raised, and for me to reply accordingly.
The Bill is necessarily a hotch-potch of measures. There is no thread, or theme, through it. It is an attempt to bring together a large number of measures all of which we hope will make a contribution to road safety and road traffic control.
Clause 6 arises as a result of a recent decision in the courts. The police do not have power to direct traffic for surveys and censuses. Hon. Members often ask for traffic information, and it will not be obtainable without this power. This clause does nothing to alter the position, because answering questions from the survey staff is absolutely voluntary. No motorist or other road used is under any obligation to give information, but without these powers it will be illegal for the police to direct traffic in a way that makes the taking of the census possible.
Clause 7 was originally introduced in the previous Bill in another place. We have re-introduced it in a modified and less comprehensive form, and it is designed to deal with environmental nuisance caused by the parking of vehicles on pavements and verges in towns. It provides for local highway authorities to grant exemptions where appropriate and for special cases such as emergencies. I know that when the Bill was previously before the House there was a general welcome for this provision, but it does present certain problems. For example, I have had representations from the Post Office Engineering Union that this provision could present problems for it in carrying out its work where it wants to use the vehicle as a safety measure for people working in dangerous circumstances. In discharging the onerous responsibility of Whip for the Committee, I am sure that my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) will give us his views as persuasively as he has done in making representations to me. We shall want to watch very carefully the regulations and the exemption procedures in the clause.
Clause 8 transforms the power of local authorities to carry out road safety work

into a statutory duty which will generally be exercised by the new county councils—something which has been welcomed in all quarters.
Clause 9 gives greater flexibility for regulations on vehicle lighting and reflectors by assimilating these matters to other aspects of the construction and use of the vehicles.
Clause 10 is an amendment to the original Bill, inserted against the Government's advice in another place, with a view to ensuring action on vehicle noise. We are all in sympathy with the objective of the clause and I gladly repeat the assurance given. If it is the wish of the Committee, the Government intend to table an amendment to substitute a more practical provision to enable noise tests to be carried out as part of spot checks on vehicles on the roads. I cannot advise the Committee to accept Clause 10 because I do not think it would be practicable as drafted.
Clause 11 puts the present voluntary scheme for type approval of new vehicles on to a statutory basis.
Clause 12 closes loopholes in the law on the sale of unroadworthy vehicles. We must all know of instances where secondhand cars have been sold in an unroadworthy condition, and there has been little redress for the unfortunate purchaser. The clause attempts to deal with that loophole.
Clause 13, in conjunction with Schedule 3, makes amendments to the law on drivers' licences, including changes which are desirable for economy in the administration of centralising licensing. It empowers the authority to inquire into medical conditions which may affect fitness to drive and to permit the issue of licences which would normally remain valid until the holder is 70. Again, largely on economy grounds, both to the individual driver and to the Civil Service in administering the scheme, the idea that instead of renewing licences every three years they would normally remain valid until the holder reaches the age of 70 has been generally welcomed.
Clause 14 provides for regulations to be made on the methods and standards of weighing vehicles so that a new type of weighbridge may be introduced to check overloading.
We now come to the provisions on minimum ages for vocational licences. I attach great importance to the safeguards envisaged by Clause 15 in relation to the driving of heavy goods vehicles by drivers under 21. I believe that these safeguards will be sufficient and effective not only in the interest of road safety, but to prevent any misuse of the opportunity afforded by the clause for the proper training of young drivers. We want a genuine apprenticeship scheme and we do not want these young people to be used as a cheap way of providing drivers by unscrupulous people in the industry.
Drivers under 21 will be able to drive only in accordance with the training scheme of the operators by whom they are employed. The operators will have to be approved by the committee set up to control the operation of the training scheme. The training board and both sides of industry will be represented on this committee, and I am confident that applications by employers to take part in the scheme will be thoroughly screened. Secondly, I envisage that the regulations which will be made under the clause to control the detailed working of the scheme will be in a form which will make any abuse or infringement of the conditions, whether by employer or driver, an offence which could result in loss of the appropriate licence.
The chairmen of traffic commissioners, who are, of course, also the licensing authorities in respect of heavy goods vehicle drivers' licensing, will be able to take the appropriate action. At present no such scheme is envisaged for training young people to drive public service vehicles. There are inherent difficulties in devising such a scheme, particularly because of the heavy responsibility which a bus driver bears for the welfare of his passengers and the lack of progression of vehicles of different sizes through which he can graduate in taking full charge of a bus-load of people.
My advice to the Committee is that while we should accept Clause 15, which was introduced in another place, we should not proceed with the proposal about public service vehicles and that this clause should be deleted.
I turn now to Clauses 17 to 19, which deal with bus licensing. The amendments introduced in another place represent a

modified version of those contained in the previous administration's Bill. On that occasion, as spokesman for the Opposition, I criticised the proposals because I was informed that they had not been accepted by many operators; they were opposed by the trade unions and they had given concern to a large number of local authorities. While it can be argued, on the one hand, that relaxation of the licences might produce extra services in the way of mini-buses, lifts and so on, there was great concern that if, as a result of the introduction of some of these services, the local authorities were unwilling to support existing scheduled services, the mini-bus operators might find that it was no longer either attractive or profitable to run their services. They might withdraw them; they might even go on holidays; they would not be under the obligation to run a scheduled service. If they disappeared, the all too inadequate routes run by the National Bus Company and other operators would have gone and it would be difficult to resurrect them. Matters could well be made worse, not better.
I think we are all agreed that there is proper cause for great concern about the inadequacies of rural transport, and that something ought to be done—perhaps something radical—to try to create a much better system. To some extent, that was already done in the last Parliament by increasing the powers of local authorities under Section 203 of the Local Government Act. Rather than reintroduce these clauses, I set up a working party under the chairmanship of my hon. Friend the Under-Secretary of State, who cannot be with us this morning because he is engaged in another Committee along the corridor. We have already had meetings with the operators and trade unions, and further discussions with local authorities are planned. We have asked that this should be delayed for a little while, but we hope that these consultations will result in other proposals for rural transport which I expect will be embodied in new legislation.
I am also advised that these clauses have certain technical defects which, if the clauses were implemented, could create problems. My advice, at this stage, is that these provisions should be deleted from the Bill. Let us continue with the process of consultation with a view to


trying to find a system which is as satisfactory as possible to deal with the real problems of rural transport.
Clause 20 and Schedule 4 contain a number of provisions to strengthen the disciplinary powers of the traffic commissioners, and have been welcomed by the road haulage industry.
Clause 21 is another clause which was reintroduced in another place and which was in the previous administration's Bill, but not in mine. It was not in mine because I have found, through discussions with both sides of industry, that nobody really wants tachographs. Anybody who does is quite entitled to have them now. No legislation is needed for that. The purpose of the clause is only to encourage them in a modest way by relieving the operators who have them of some record-taking in the normal form. As I have discovered, there is no great demand for this. It was, I believe, only introduced in the context of forthcoming EEC commitments, particularly for the arrangements planned for 1979. So I do not think that the time scale is pressing. Certainly, as the Committee knows. there are other important matters relating to Europe which have to be determined long before that. I therefore ask that this also be deleted when the time comes.
Clause 22, I gather, has caused a certain amount of controversy. However, I think that many of the people who have beseiged us with communications about this proposal to conduct experiments in the use of road humps for controlling the speed of vehicles have misunderstood what is involved. It is not proposed that this should be a general power to highway authorities, the Secretary of State, or anyone else to start putting these humps in the road. What is proposed, and which we cannot do without specific legislative authority, is that the Transport and Road Research Laboratory should have power to conduct some experiments particularly on a new type of hump which it has developed. This is 12 feet long and 4 inches high and, it is claimed, will not have any detrimental effect on the vehicle and certainly will not create the problems to which owners of two-wheeled vehicles think they will be subjected. It will only cause trouble to people who drive over it recklessly. There would, of course, be

signs and warnings, and the experiments could take place only with the consent of the highway authorities and the specific approval of the Secretary of State. It could not be generally extended without further parliamentary authority.
As hon. Members will know, we are all constantly under pressure to do what we can about road safety, and it seems that this method, which is widely used on private roads—with perhaps rather cruder humps—should possibly be considered as a means of checking the speed of traffic at particularly dangerous points where all the evidence of accidents suggests that some more effective measure than merely signs is required. Therefore, whilst I appreciate that there is some controversy, I hope that this can be given a fair run, with the House understandably taking a great interest in the conduct of the experiments and being very loath to widen their use without being absolutely satisfied that this is an effective and worth while road safety device.
Clause 23 regularises the use of flares by the police as warnings to traffic at night and in fog. They have been used for some time, but there is some doubt about their legality. In view of the concern that I know all hon. Members have about fog on motorways, I do not think that we would wish to take that power away from the police.
In Clause 24 there is a power to detain towed away vehicles until charges are paid. This is complementary to the provisions to Clauses 1 to 5 to strengthen control of parking in cities.
The provisions of Clause 25 have been welcomed by the motor insurance industry. Most of the companies are already affiliated to the Bureau, but I think it is desirable that they should all so belong.
Clause 26 and Schedule 5 vary the penalties for road traffic offences. This is very largely, of course, a matter of up-dating and standardising in accordance with the unfortunate fall in the value of money. One provision has given rise to controversy in that the Magistrates Association criticised the fact that magistrates would lose the power to imprison for road traffic offences except for that of driving while disqualified. These criticisms were fully aired in another place, and my right hon. Friend the Home Secretary gave very thorough consideration


to all the points which were raised before endorsing the proposals which we have taken over from the Bill introduced by the previous administration. My hon. Friend the Minister of State, Home Office has had a number of meetings with the magistrates concerned. In fact, I will let the Committee into a minor secret. One reason for the delay in reintroducing the Bill was the time and consideration that the Home Office was giving to this particular matter. I understand that magistrates are not anxious to send people to prison for this or almost any other offence and I feel that, although it is not my prime responsibility, these provisions are right. I supported them when the previous administration introduced them and I hope that they will be approved in this Bill.
In addition to proposing the deletion of some clauses for the reasons I have given and one or two drafting amendments, I should like to introduce one new clause. It is not at all controversial, but hon. Members will know that there was a great deal of controversy and concern among the public—many of us had letters from our constituents—about the selling to unsuspecting motorists of tyres which had been rejected by the manufacturers and which were suitable only for farm vehicles with low speeds. There was great concern when a number of accidents occurred because of this, and I think it is right to take this opportunity of bringing in the clause, which has been a little difficult to draft, in order to stop this practice—not merely the sale of tyres, but the selling of any unsuitable components to unsuspecting motorists.
I appreciate that I have gone through the Bill rather quickly. It has been rather a mixture of a lot of measures, but I feel that these measures together will make a contribution to road traffic control and road safety, and I hope that the Committee will agree to this motion.

10.58 a.m.

Mr. Marcus Fox: I have listened with great interest, as I am sure my hon. Friends have, to the explanation given by the Minister. He deserves attention. He has been in and out of office in this job on a number of occasions, and I am rather afraid that some of what he has said to us this morning will ensure that his departure may on this occasion be somewhat speedier.
I assure the Minister that we have no intention to oppose the Second Reading. The Bill will, we hope, help to reduce road casualties, and because of the previous agreement, we had looked forward to doing something to help people in rural areas who want better public transport. Apart from the 1967 "breathalyser" Act, it is about 10 years since we had the last Road Traffic Act. Had it not been for the General Election, as the Minister said, we should have introduced a Bill very similar to this in total. It commenced its journey in the last Parliament, and what I have to say will take account of what took place then.
My position is very similar to that of my right hon. Friend the Member for Yeovil (Mr. Peyton). We were surprised to read initially that a number of important clauses had been deleted from the Bill in its present form. We felt that the relaxing of the bus licensing system was extremely important, as was the lowering of the minimum age for driving heavy goods vehicles and passenger vehicles. There were others, but those were the two most important points. However, thanks to decisions taken in another place, we now have before us what we on this side consider a much better Bill than was presented to their Lordships a few weeks ago. Contrary to what was expected originally, we can look forward to a fairly long debate on Friday, and there will be a few hard words to say.
As the Minister said, it is not easy to summarise the aims of the Bill. It touches so many aspects of road transport that all we can do is say that it will certainly strengthen and up-date the law regarding road safety and the environment. We welcome many of the provisions to restore the effect of the law on parking in our cities, a menace that any Government would have had to tackle. My hon. Friend the Member for Chippenham (Mr. Awdry) will have more to say on that. We welcome the new emphasis on road safety and other measures which take account of the reorganisation of local government. These are important matters, and it is right that Parliament should tackle them from time to time.
Because of the Bill's complexity, I select only one or two important issues, knowing that my hon. Friends will cover other matters. The additions to which the Minister has referred are few. None of us.


can take exception to Clause 6, which merely enables the police to carry out traffic surveys. It is eminently sensible to put right an anomaly which was pointed out in a court case not long ago.
On Clause 22, we have grave reservations about the need to conduct experiments into the effectiveness of road humps. The Transport and Road Research Laboratory, I suggest, can do all that is necessary here. Personally, I doubt the extent to which this type of safety measure can be used. I have in mind the experience of the Freight Transport Association, which has friends on both sides of the Committee, which asked 1,000 executives to look into the matter. The association reported that it viewed an extension of humps with many fears. Indeed, in Northern Ireland there are many bad examples of their use, resulting in damage to vehicles and goods. I give notice, therefore, that we may seek to remove that clause on Friday.
I come now to what we consider a retrograde step, namely, to take out of the Bill the clauses relating to the relaxing of bus licences. I am amazed that the Minister should again talk of consultations. We have had them regularly since 1971. I am intrigued that a working party has been set up by the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael). I hope that what he said on 30th January in the previous Second Reading debate will be borne in mind by the Minister:
I accept that the rural bus service is a difficult problem, but I am slightly worried by the suggestion that we must take care of the scheduled services. In some parts of Scotland that I know well there may be a rural bus night and morning only, but it would still be on an existing bus route that a mini-bus, for instance, would operate. It would be difficult if some sort of concession were not allowed between, say eight o'clock in the morning and five o'clock in the evening. It is bad for old people to have to go to market towns at eight o'clock in the morning and have to wait until five o'clock in the evening before being able to return. I hope that there will not be too many pettifogging regulations about the use of minibuses on existing bus routes."—[OFFICIAL REPORT, 30th January 1974; Vol. 867, c. 474.]

Mr. Mulley: I should make the point—the hon. Gentleman will no doubt agree—that, in choosing my hon. Friend

as chairman of the working group, I have chosen someone with a real concern for doing what may be necessary in rural transport, even though it may be a little unconventional.

Mr. Fox: I am glad of that assurance I only hope that the fruits of power have not tainted the hon. Gentleman already. I have a sneaking feeling that he may come forward with something quite contrary to his remarks when he was a pure back bencher.
I thought that the Minister accepted the need for a relaxing of this system. We are talking here about country areas which often have no bus service at all. Were we seeking only to defend areas with some bus services perhaps we could go a little of the way with him, in many parts of the country now there is literally no public transport service at all. Rail went long ago, and many of our bus services have been gradually taken away. Had we had the courage in 1968, I think we should have accepted that fact of life when we introduced that Act. The writing was on the wall, and we should not fail now, six years later, to take action to help these deprived people. They are indeed deprived. We are talking here of elderly people and young wives with children who are literally isolated. I am horrified to think that the Government are doing this for political reasons. I shall pursue that on Friday in the House. I can only think that, once again, the unions are wielding the big stick. There can be no other conclusion.
I defy anybody to tell me of an area where there is not a shortage of bus drivers. I do not know of one, but I could be wrong. There may be one small corner of England, Scotland or Wales where there is a surplus, but within my knowledge the difficulty is to get bus drivers. So why they are defending jobs that do not exist is beyond my comprehension. But let us not go into too much detail about that at this stage.
The public interest must come first. What is proposed in the Bill will give protection to existing operators. We simply want to change the emphasis in relation to the traffic commissioners and put the public interest first. This is only taking account of changed circumstances. Some 40 years ago, the commissioners


were established by Act of Parliament, and in the inter-war years many operators were put out of business because of pirates who creamed off their best traffic. But it is nonsense today for that same approach to be taken by these gentlemen. The public interest must come top of the list. I am sure that people in rural areas anyway will understand what we are trying to do.
I move now to the clause relating to the reduction of the driving age. I am glad that the Minister has made clear that he does not intend to remove this clause, although he has said that he will remove the clause relating to drivers of public service vehicles. I am delighted that he has seen sense regarding heavy goods vehicle drivers. This is where the big problem lay. We have all had letters from constituents in the road haulage industry who have been short of drivers. It is right that the age should be reduced from 21 to 18.
We accept that the driver apprentice scheme must go hand in hand with that change. None of us imagines that a young man of 18 will automatically step up to the biggest lorry and be able to drive it. But at long last there will be a chance for the industry to have a career structure for drivers. Many young people leaving school want to enter this sort of work, and I believe that what we are doing here will be of great help not only to the industry but to those individuals also.
We shall not oppose the removal of that part of the clause referring to public service vehicles, because that is not a problem, and I think it fair to say that, had that clause gone through, one would not have had people of 18 driving a double-decker bus. Obviously, within the industry there would have been a similar sort of training scheme.
I move on to the clauses relating to the fixed penalty system. The Minister is right to draw our attention to the fact that the law has been flouted. My information is that 1 million fines remain unpaid each year. None of us can support the disregard of an Act of Parliament. I welcome the change to owner liability. But I have one question for the Minister. Although the owner will be liable, may we assume that there will be no question of these offences being recorded against

him? For example, if he owns a few cars and everything is recorded, he will have a pretty substantial record if he is himself caught on anything. He may well not be guilty, save in the technical sense. I should like that assurance.
I agree with my hon. Friend the Member for Hampstead (Mr. Finsberg) that we should turn our attention to the number of diplomats who claim immunity on this type of offence. It causes great resentment to many of our people when they hear of such cases. Although we are not talking of hundreds of thousands, in relation to the number of diplomats who can claim this privilege the number of cases is enormous. I think that we may be able to do something about that, but I leave it for the Minister to consider.
The road safety provisions in Clause 8 are extremely important. I welcome the duty on local authorities to promote road safety. Perhaps they will for the first time turn their attention to the comprehensive training of young road users. We all know that drivers are most accident-prone between the ages of 17 and 24. We must somehow ensure that local authorities provide the basic training that should be given before anybody goes on the road in a vehicle. We are lagging behind many other countries in driving training in schools. I am told that in America 95 per cent. of pupils have this driver training. We have a golden opportunity—with the problems relating to the raising of the school leaving age—to introduce something that could keep many of these pupils occupied. If we need any help, I am sure that the Army or the Air Force could give us a few tips on how to train pupils of that age.
Next, Clause 26 and the penalties for certain road traffic offences. I know that some of my hon. Friends are concerned about the power being taken away from magistrates. I, too, am concerned. The Home Office under the previous Government accepted this as in line with the thinking on penal reform. None of us wants people to languish in prison for offences that could be dealt with in another way. But there are grave fears that, by removing this deterrent, we may be doing a disservice. I shall look closely at the matter before we reach the Committee stage on Friday. The Magistrates' Association and the Justices' Clerks


Society are two responsible bodies, and we must consider their evidence carefully.
We are not surprised that the move on tachographs is seen to be another attack, as it were, on the Transport and General Workers' Union. I have no doubt that Jack Jones has made his views known on tachographs. It is a simple clause. There is no compulsion to instal tachographs; it is merely that duplication in written work will be done away with. I see no reason for taking that clause out of the Bill. We shall, perhaps, pursue that on Friday.
The Minister will be glad to know that I agree with him on one point. I should hate to think that on Friday, along with all the other points I have suggested, we might get round to the compulsory wearing of seat belts. I assure him that there will be no official attempt from the Opposition to introduce that into our debate.
Finally, what does the Minister intend to do about the assurance that was given in another place about the banning of vehicles parking at urban junctions? Was it an oversight that he did not mention it? Or did I, perhaps nod off at the time he mentioned it? Assurance was given that a new clause would be tabled. I am not pressing for a new clause, but I am a little anxious about a 30-yard restriction at junctions. If, from the point of view of parking, we remove 30 yards from each of the ½ million road junctions in this country we may be overdoing it, over-egging the pudding as it were. I think that 15 yards may be sufficient. It is argued that there are a few occasions when 30 yards are needed. Are we right to try to legislate for those few occasions? Local authorities already have the power anyway, and 15 yards would, perhaps, be adequate. I simply ask the Minister whether it is intended to introduce a new clause.

Mr. Mulley: I shall deal with that, but I should like the hon. Gentleman's views as well. I made some observations on the previous occasion along the lines he has just spoken, and I wonder whether every junction in this country, including those in back lanes and quiet residential areas, even cul-de-sacs, should have 30 yards. It would pretty well neutralise parking in all the back streets.

Mr. Fox: I am sorry. I thought that my views were clear. I do not suggest

that we introduce a clause to bring it back into the Bill. That should tell the Minister what he wants to know, but I was interested to know his thinking.
I hope that the Committee has not got the impression from my observations that the Opposition are opposed to the Bill. We need the Bill. Many parts of it are long overdue. I only hope that common sense will prevail and that on Friday the Bill will remain as it is now.

11.16 a.m.

Mr. Alan Clark: I make no apology for returning to Clause 26 and Schedule 5. The Minister spoke about the Home Secretary's long reflection on this matter and said that the present delay was in part due to the consultations with magistrates. However, the Committee should reflect seriously about it.
The effect of the clause is to remove completely from magistrates' courts the power of imprisonment for all offences other than those of driving while disqualified. We know the sad statistics of driving while under the influence of drink and of the rising graph every year. Were this power to be removed from the magistrates' court, besides reducing the deterrent effect it would result in a serious increase in the case load in the Crown courts.
Furthermore, the offence of failing to stop after an accident—which may seem fairly innocuous—covers the much more serious case of the hit-and-run driver. Here again, if magistrates are no longer allowed the power to imprison for offences of this nature, there may be a serious increase in such offences because of the inevitable downgrading which this reclassification seems to imply.
In addition, there are the numerous offences relating to forgery of documents in connection with regulating one's motoring affairs, in particular, the forging of documents so as to obtain third party insurance. Here again, a serious state of affairs is latent. When an offender forges a document to allow him to be issued with an insurance certificate and then, in a subsequent accident, his insurance cover is found to be false, those who suffer in that accident will suffer financially also when the insurance deriving from the forged document is found to be abortive.
By removing the power of imprisonment from magistrates one also removes automatically those powers which magistrates enjoy under the Criminal Justice Act 1972 to commit offenders under 21 years of age either to borstal, to a detention centre or attendance centre, or even to make a community service order. I hope that the Committee will agree that to some extent that vitiates whatever possible benevolent intentions of penal reform are inherent in what is proposed. In effect, it will severely restrict the power of magistrates to deal with offenders, particularly younger offenders outside imprisonment.

11.20 a.m.

Mr. Geoffrey Finsberg: I think that the Bill has a large number of gaps, and the Minister has not given a satisfactory explanation of some of the issues involved. I start with what he said about traffic offences and parking offences committed by the diplomatic corps in London. I am surprised that he should come to this Committee knowing the number of questions that have been asked in the House over the past two or three years and not be able to give us the figures. By the time he comes to reply, I hope that he will be able to provide those figures. My information is that they run into several thousands per year, and I certainly hope that he will not be left bereft of statistics by the time he comes to reply. Up to now I fear that he has not been of much help to us in providing the figures.

Mr. Mulley: I said that I would do my best to get the figures. It is not really one of my responsibilities, and my point was that it would be wrong to think that if the diplomatic problem did not exist the case for the owner-liability would not exist. I felt that that was the suggestion in some quarters. The numbers are thousands, not hundreds of thousands as the hon. Member has said.

Mr. Finsberg: I hope that the workings of the bureaucracy of the Department will provide the figures by the time the Minister comes to reply.
I am surprised that the Minister has not sought to do something to tighten up the law affecting vehicle excise licences. I should have thought there was a case—rather supporting his hon. Friend the Member for Newham, North-West (Mr. Arthur Lewis) who is so

vigilant on the matter of the number of vehicles, particularly in London, remaining on the streets unlicensed—for introducing a clause to give power to impose on-the-spot fines for people not displaying or possessing a valid excise licence. Perhaps we shall have to do the Minister's work for him and table a clause on that ready for Friday.
I think the clause on the sleeping policeman is a doubtful proposition. I first encountered the sleeping policeman in what was then British Honduras and is now Belize. Subsequently I saw it in Jamaica. There are mixed feelings among the authorities there. Perhaps there are not so many objections in rural areas as there would be in towns. In general, the sleeping policeman has a function not always readily acceptable. In all countries where it exists Ministers seem to think that it may aid road safety. I do not believe that it will. I should like to see the clause deleted, or a limitation put upon the length of time for any individual experiment—say, 15 months. That would allow a full 12 months' observation and then a couple of months to remove the installation rather than—as I read the Bill as drafted—for the sleeping policeman to remain as long as the Minister wishes to be there.
Equally, I should like to see better protection for local residents in the method of objection offered to them. I hope that between now and Friday the Minister will have further thoughts on this.
I want to declare an interest, being a life member of the Magistrates Association. I should have thought that the Minister would have had representation on Clause 26 from a close member of his family. I recall that his wife is an active member of the Magistrates Association. Many of us made representations to the previous Government saying that we thought they were utterly wrong in taking away from magistrates the power to imprison if they thought it necessary. One cannot have the professed views of suecesive Lord Chancellors about the excellence of our lay magistrates and how much more expensive and less efficient it would be to introduce a stipendiary magistrates system throughout the country, and then have in a tiny, obscure clause of a relatively unimportant Bill this massive reduction in the powers of lay magistrates.
I hope that my hon. Friend the Member for Shipley (Mr. Fox), who is leading for the Opposition in the Committee, will table an appropriate amendment for Friday so that the House can decide whether it really wants to downgrade the status of lay magistrates as the Bill wishes. I make it clear, as the Minister quite fairly did, that the Minister inherited the clause from my party, but that does not make me any more enthusiastic about it. I have criticised them on various occasions for certain measures, and I shall go on doing so. But that does not excuse the Minister taking over a bad piece of legislation and trying to tell the House that it should be accepted. Whatever cosy arrangement there may be, or may have been, between the Front Benches in the last Parliament, I hope that my hon. Friend will not be a party to that sort of behaviour on this item.
I should like to ask the Minister a question about Schedule 5. One of the offences for which he appears to be altering the penalty is the last but one on page 55:
Tampering with parking meter or using false coin, etc.",
where the present maximum penalty is
£50 or 3 months imprisonment or both".
He proposes simply to delete the
or 3 months imprisonment or both".
He must know that massive sums of money are being lost in London boroughs such as my own borough of Camden. Yet, so far as I can see, he is going to delete the power of imprisonment—if there is another provision to replace it, I have not found it—and leave the penalty at this low fine of £50. This really is not good enough. It may be a slip-up; it may be an oversight, or I may have got it wrong, but if I have got it right I urge the Minister by Friday either to drop this alteration or to increase, possibly to £200, the penalty for second and subsequent offences in this category which are causing great problems to inner London boroughs.
I notice that the Bill proposes to make changes in the law relating to road traffic, and it talks about road safety. I have had many discussions over the past two years with a very distinguished constituent of mine, Mr. Edward Terrell QC, who I

think is not unknown to the Minister or, indeed, to his advisers. I shall certainly be seeking on Friday to move some new clauses which would give the force of law to some of the main rules of the highway code. Mr. Terrell has been one of the leading experts in this country on road traffic, an honorary Recorder of Newbury, a Recorder of the Crown Court and the author of a well-known book on road traffic offences which has run into over three editions.
He started looking at this question of road safety and the highway code as long ago as 1965 and has tried to persuade successive Ministers, without much success, to put some teeth into the highway code. I propose to put forward some clauses which Mr. Terrell has drafted, which I believe are sensible clauses and would go a long way towards reducing the growing toll of deaths and serious injuries.
I wonder whether the Committee realises that in 1968, for example, deaths on the road totalled 6,810 and serious injuries 88,563. By 1972 the figure of deaths had risen to some 7,700. The number of serious injuries rose from 1968 to 90,000, then to 93,000, and then returned to 90,000—possibly as a result of the breathalyser—but it is creeping up again, and in 1972 had reached 91,300.
I believe that a Minister of Transport cannot remain oblivious to any contribution to road safety which can reduce the number of accidents by making the penalties much tougher for those who break the law. However much he may be advised by his officials that it may be difficult to find a perfect answer, nonetheless I think that he has a moral responsibility to adopt measures which will help to reduce road accidents. I hope that if amendments are put down, selected and debated, he will have an opportunity to explain to the House why he cannot accept them. I hope he will not be put in that embarrasisng position but that he will be able to say to the House that he willingly accepts them.
He will then go down in history as one of the good Ministers of Transport. There have not been all that number. The only ones who will be remembered by posterity are Hore-Belisha, who I think can be accounted as the best Minister of Transport the country has ever seen; the


right hon. Lady the Member for Blackburn (Mrs. Castle), who, however much one might have disliked the way she did it, reduced road deaths and accidents by the introduction of the breathalyser; and possibly my right hon. Friend who is now ennobled and whose new title I cannot recall—Ernest Marples. I am bound to say, with the greatest deference and friendliness to the Minister, that many people would be happier to see him occupying the seat than the right hon. Gentleman who now occupies it—for different reasons perhaps. Nonetheless Ministers of Transport do not often have monuments erected during their lifetimes, nor are they much remembered after they have left this place. The Minister has an opportunity of improving the Bill and he may then qualify for the "Hall of Fame" of Ministers of Transport.

11.32 a.m.

Mr. Ralph Howell: My main interest in the Bill is centred around the Government's intention of removing Clauses 17 to 19. There will be a tremendous feeling of disappointment in the rural areas by people who were hoping to get something from the Bill which would help to alleviate the difficulty of rural transport. The disappointment will be added to by the fact that we have seen a display of outdated doctrinaire socialism at work here today. It is about time the Socialist Party started to care about people and not about their restrictive practices.
I represent a rural area where we have declining bus services, as do practically all other rural areas, but perhaps my rural area of North Norfolk is one of the most sparsely populated areas in the country and there are many villages that have no bus service at all. I wish the Minister would pay a little attention to what I am saying.

Mr. Mulley: I am taking in completely the hon. Member's point, that he is concerned about the bus services in his constituency.

Mr. Howell: That is very good. I am glad to hear it. It is a problem which we must face. I do not know whether the Minister really thinks that Eastern Counties buses will lumber up and down little narrow country lanes carrying two

or three people for ever more. This simply cannot go on.
In North Norfolk, which is one of the lowest wage areas in the country, we have one of the highest percentages of car ownership. It is simply a necessity: one must have a car to get to a town. The mere fact that it is necessary to have a car means that bus services are becoming less and less economic as more and more people are compelled to have cars. To go on believing that one can keep scheduled bus services for ever is burying one's head in the sand.
I beg the Minister for once to think about people rather than about the restrictive practices of the unions. They are out of date, and what held good in 1940, 1950 or 1960 is not practical today. I hope that a few hon. Members opposite will have the good sense to prevent the Government from making an awful hash of it and from presenting this old-fashioned image of themselves. This, to my mind, is even more serious than the aspect which we are discussing now. It is one of the tragedies of this country that the Socialist Party does not advance with the times.
The people about whom I am particularly thinking are, to a very large extent, people who do not necessarily vote for me. Surely the Minister could think a little more of the people who, even in rural Norfolk, have been solidly supporting his party for years. They want mini-bus services which are practical and which would help them to get to the town, to the doctor, to the dentist, or whatever appointment they need to make. We have reached a stage now where bus services in these rural areas cannot be sustained. A minibus service could be operated. People could phone in to a central point. Free enterprise—and only free enterprise—could do this job. There is no other way of supplying this service which people in the rural areas must have, other than by the operation of mini-buses in a truly free enterprise way. I beg the Minister to take notice of my plea, to change his mind and leave these clauses in the Bill.

11.37 a.m.

Mr. Tony Durant: I should like to take the opportunity of commenting on one or two of the clauses.
I think that Clause 7, which relates to parking on the verges, is a worth while


measure, but, as someone who has spent time in local government, I think we must appreciate that its implications are tremendous.
Council estates which were built well before the war lack garage space. This measure will result in tremendous parking in the streets. Many of the roads in these council estates are very narrow and this will result in great difficulties with public service vehicles, dust carts, and so on. I hope the Minister realises that local authorities will be coming back for more money to take into account the garaging element in particularly large council estates. There are a large number of these in Reading, and this is one of our problems in that area.
I should like to refer to Clause 26 and Schedule 5 which relate to fines. I find it somewhat surprising, and I think that perhaps they have all been increased in a carte blanche way, without careful examination. I find it surprising, for instance, that the fines for contravention of pedestrian crossings are the same as for failure to stop at a school crossing. To my mind, there is a subtle difference between the two. One is a statutory crossing area and the other is done by what is called "a lollipop man", and it can be argued whether or not he was in the road. I think that this heavy fine will perhaps give rise to a great deal of litigation and argument. I ask the Minister to look at the two cases. The fine in one case may need to be increased, and, in the other, reduced. The financial effects there are quite important. I think that these fines have all been increased instead of having been studied individually. The main emphasis should be on dangerous driving when considering the imposition of fines.
I now come to Clause 8 and the financial effects mentioned in the Bill. I think it is a pity that we should cut the grant to the Royal Society for the Prevention of Accidents. I have supported that organisation for many years. It is a retrograde step to cut that money when the organisation does such good work, particularly in its campaigns, instructions to drivers, and training of schoolchildren. It would be a pity to cut that grant of £100,000.
Let us consider what is missing in the Bill. I welcome the Minister's mention of bringing in a clause about tyres. The

opportunity should have been given in this Bill to clear up the position about pedestrian crossings and the begetting of pedestrian crossings. It has been a very confused picture. At one time all pedestrian crossings had to be sanctioned by the Minister. The rule was then changed to a pedestrian crossing for so many head of population; then we had the situation in which if more crossings were wanted the Minister had to be consulted.
I was involved with a traffic scheme recently. We had to submit the scheme first, then find out whether the locality was dangerous, and install the pedestrian crossings afterwards. The public really does think that this is madness of the first order, and the whole subject of pedestrian crossings should have been considered in the Bill.
It is a pity, too, that the Government have decided to drop the road junction aspect which was in the original Conservative Bill, and that it has not been put back.
I also feel that another opportunity has been missed here for wider consultation with the public on road traffic schemes. Local communities get worked up into a great frensy when a new traffic scheme is introduced. There are marches, delegations and petitions, and if opportunity were provided in this Bill for consultation with the public before the schemes were implemented it would ease much unrest.
I hope that the Minister will take note of these points.

1.42 a.m.

Mr. Jim Lester: May I mention two points? Along with others of my hon. Friends, I was very sorry to hear that the Minister is withdrawing Clauses 17 to 19 on rural buses. There have been many surveys of areas with low populations, and I should have thought it had been proved beyond argument that the only practical way to solve the immediate problem of the rural areas is to allow the immediate use of smaller versions of passenger-carrying vehicles. In many areas in my constituency, if it were not for the fact that people helped one another—there was a self-help organisation and if someone was going into town the message would get around and those without cars would be helped—transportation would have broken down entirely.
As my hon. Friend said, a 40-seater bus milling around half empty in some of the very sparsely populated areas—the demand is so infrequent that there is no call for a regular service—is the reason why bus companies have withdrawn the regular services. When one considers, as I have, subsidies of £40,000, to ensure a regular bus service for a series of villages, which was not used to the extent it should have been, I should have thought that the argument had gone a long way past even looking again at the problem. What we really want is for these clauses to allow the immediate use of small passenger-carrying vehicles.
Equally, when considering the rise in the rates, the actual cost of subsidising rural transport through a transportation scheme which involves the big rural areas is something that I should have thought any Minister would have wanted to miss.
I should like to refer to Clause 22, on the sleeping policemen. I may differ from my colleagues, as I was responsible for the introduction of sleeping policemen in my own area on internal roads. We have found them remarkably useful and effective on internal roads, schools and sports centres. They work very well indeed. If one is to use them on roads generally, one should proceed very carefully indeed and, before introducing an experiment with a road hump, one should introduce an experiment with a rough road—I call it "rough road"—a road with sufficient roughness to draw the driver's attention to a change. If anyone wants to see how this works, there is a dangerous bend on the Al where someone has made this experiment. Three sections of rough road are there, and one is immediately conscious that one must take one's foot off the accelerator and look out. In the circular and in the experiment it ought to be suggested that both methods be considered—rough road as the first stage, and if that did not work, then the road hump as the most extreme form.

Mr. Finsberg: I do not think that my hon. Friend and I are far apart. For convenience and time saving, I did not go into the distinction of internal and other roads, but, so far as I am aware, for internal roads—on housing estates, for example—which serve private residents one would not need to get permission from the Ministry of Transport or legislative approval.

Therefore, I think there is a difference; internal roads are a separate issue.

Mr. Mulley: The whole point of the clause is to permit, in the first instance, experiments, but as I said, it would not be possible to extend the experiments to general use. One needs parliamentary authority and we cannot have a single hump, quite rightly, without legislative approval. Private estates are a different matter.

Mr. Lester: I am grateful for that intervention. But I continue to press that we should use rough roads even more extensively than we do now. Where we believe the safety speed limits to be critical, we should experiment with sections of rough road, because I find that today's plethora of road signs makes them meaningless. One reaches a junction and is sometimes greeted by anything up to 17 road signs, and in trying to flash them through one's mind to decide what to do one finds that one may just have missed the speed limit sign. The speed limit is the most critical sign, so I should like the Minister to think of introducing just a small section—20 yards, say—of rough road before the most critical speed limits at spots with an accident record. I believe that one can persuade people gently but physically. Everyone cares for his car. If sounds are heard coming up through the road wheels he involuntarily slows down, and this is a practical way of saving lives and enabling drivers to obey the law.

11.48 a.m.

Mr. Daniel Awdry: In winding up this short debate on behalf of the Opposition, I make a minor protest at the start against the Second Reading Committee for a matter as serious as this. It really is not satisfactory for a Bill of 29 clauses to be taken in a Second Reading Committee. There must be many hon. Members in the House who would like to join in a debate of such importance. Nor will it be satisfactory to try to complete all the remaining stages on a Friday. As the Minister said, Friday is not a very good day for hon. Members to attend; they have their constituency engagements. Of course, we cannot have a debate on seat belts, but we shall have to think very hard about how on Friday we shall get through all the important issues that have been raised.
We on this side do not oppose the Bill in principle. We could not; it was largely fostered by us. It was largely the idea of the previous Minister. But, of course, a number of points have arisen today which we shall have to raise strongly again on Friday.
I deeply regret the exclusion of Clauses 17, 18 and 19 relating to rural buses. We had a very robust contribution from my hon. Friend the Member for Norfolk, North (Mr. Howell), and other hon. Members have spoken. My hon. Friend referred to Norfolk, and I can refer to Wiltshire where we have the problem as well. I agree that the time has come for action rather than more discussion—setting up more consultations, committees and so on. This is a subject we have all known about for many years, and it is time that action was taken to deal with this crisis—I can describe it as nothing less, of transport in rural areas.
It has been a rather one-sided debate in a way because all the back bench Members who have spoken have been from this side. There has not been a single contribution from a Government back bencher—no doubt, of course, in order to see that we make progress. But this brings out the point I made at the start, that it is not a satisfactory procedure. It is not a particularly political debate, and contributions from both sides must be useful when we are trying to save lives on the roads.
Both my hon. Friends the Members for Plymouth, Sutton (Mr. Clark) and Hampstead (Mr. Finsberg) made powerful speeches about the question of the removal of the power from magistrates to sentence to imprisonment. There was a time in my life when I practised a lot in magistrates' courts on driving offences. I take the point made by my hon. Friend the Member for Plymouth, Sutton, on certain aspects of cases. He referred to the hit-and-run case and to the forgery cases. These can be very serious offences—the man who knocks someone down and drives off, or the man who gets his documents through forgery. There will be a risk that if we do not allow magistrates to sentence these offenders to prison, the seriousness of the offence will be downgraded. That would be contrary to the interests of good criminal

justice and it is something to which we must return on Friday. I realise the Home Office has its views, but we shall certainly present our own views forcefully on Friday.
My hon. Friend the Member for Shipley (Mr. Fox), who opened for the Opposition, said that I would refer to two clauses. I wish to mention Clause 30, which prohibits the parking of vehicles on verges and footways in urban areas. I can understand the purpose behind the clause. It seems sensible to prevent cars and other vehicles from obstructing footways and verges. But what of the motorcycle? I do not believe that they are properly considered here. Has the Minister had representations from the motor cycle industry on this point? He said that he had received representations from other people—he referred to the Post Office—but has he had representations from the motorcycle industry? What possible harm can a motorcycle do if it is parked on a verge or on a footway?
A motorcycle has two wheels, and is an extremely useful vehicle for shopping and for commuters. This applies to the moped, too. Surely we should encourage people to use mopeds, which use very little petrol—they do 125 miles to the gallon—but Clause 7 states:
Subject to the provisions of this section, a person who parks a vehicle, other than a heavy commercial vehicle,".
That includes the motorcycle. The Minister can get round this difficulty if he wants to, either by redrafting that definition and simply referring to a vehicle "other than a motorcycle or moped" or he could deal with it in the regulations, because he has to produce regulations as to how the Bill will work.
I therefore ask the Minister to give an assurance that it is not intended that Clause 7 should prevent people from parking motorcycles. If he persists, he will get into difficulties because motorcycles and mopeds are parked in little lanes and paths which are not footways. If we are to ask courts to adjudicate whether a motor cycle has been parked on a footpath, and whether it has been dedicated, there will be a lot of unnecessary trouble in the courts. That is a serious point. Little has been said about motorcycles in this Second Reading debate, and I ask the Minister to give us an answer.
Now a word on Clause 22, and on what my hon. Friend the Member for Hampstead has referred to as the sleeping policeman. That is a good description. This is experimental and, as the Minister said, it is not a general power to him but simply a power to start an experiment. But are we absolutely certain that this is the sort of experiment we want? I query that. An artificial hump or depression is to be built into a road with the intention of slowing people down. There will, of course, be a warning that humps are about, but again, have we thought about the poor motorcyclist?
Suppose there is bad weather, that it is snowing and the sign is obstructed. We may cause a hazard to a man who is quite reasonably travelling at a fair speed on a motorcycle, who hits something that is four inches high in the road, deliberately put there by the Minister's experiment, and shoots over the handlebars. Have we given enough thought to this? I therefore ask the Minister to reassure those who ride mopeds and motorcycles that their interests have been considered. The time has not yet come to play about with experiments of this kind. Once again, it is something to which we should return on Friday.
The Minister will now appreciate that we shall have a busy day on Friday, because we want to get the Bill through. But we are worried about one or two specific points, and I hope that, in replying now, the Minister can meet the points that I and my hon. Friends have raised so that we shall know that some progress can be made on Friday.

11.55 a.m.

Mr. Mulley: May I have the leave of the Committee to speak again?
I am most grateful to all the hon. Members who have made, I am sure everyone will agree, constructive and helpful contributions to a subject which is not one of party-political character.
The hon. Member for Chippenham (Mr. Awdry) made an important point. Why a Second Reading Committee? I am grateful to the Opposition for agreeing to this procedure. Bills can come here only if there is agreement by all parties, if the motion is on the paper for 10 days, and so on. Secondly, why a Friday? The brutal fact of life is that

we either try to get the Bill through on Friday or we start from scratch again. I do not know the likely course of events, but I predict that if we come back in October for a tail-end session there will probably not be time for the Bill to go through Committee, Report and Third Reading stages. Therefore unless we concluded all the stages before the recess, I guess that it would be "curtains" and the Bill would have to be reintroduced again for third time.
Many of the measures in the Bill are agreed. Everybody wants them. They are not controversial and, for my part, I should be happy to drop everything that is controversial, which is one reason why I have made the proposals to delete certain clauses. On that proposition we could make very fast progress.
Perhaps I shall now be successful in persuading hon. Members not to hold such strong views when they leave the Committee as when they came in.
We all agree that the essential argument is about rural transport, and that it is a problem. The hon. Member for Norfolk, North (Mr. Howell) made a powerful speech on behalf of his constituents, and we all know that there is an enormous problem. But we should not clutch at the first set of solutions presented. If there is any difficulty there let me put to the Committee this point. In another place the form of these clauses was significantly different from that presented by the previous administration in their last Bill, and they had nearly four years in office. I do not doubt their sincerity in trying to grapple with the problems of rural transport, but they did not achieve anything.
Even within the six months intervening period we have had another modified set of proposals in addition to those originally proposed in the Bill. It is not just the trade unions; it is the operators and many local authorities who are not convinced that this kind of solution will necessarily solve the problems and may—I put it no higher—make them much worse. It is all very well to indulge in a bit of union-bashing—a point made by the hon. Member for Shipley (Mr. Fox). The union is not concerned about jobs for bus drivers, because for many years there has been a shortage. The union is concerned, as members of the community,


to get a system that will improve, rather than reduce, the existing services.
Everyone talks about a mini-bus as though that were the answer, because it is only half, a third, or quarter the size of a normal bus, and that this means a corresponding reduction in costs. Far from it. The biggest element in transport generally, and particularly in road passenger transport, is the driver's wages. It costs just as much per hour for a chap to drive a mini-bus as to drive a bigger bus. While, clearly, in running smaller vehicles there is some saving in fuel and depreciation costs, it is nothing like the saving that is imagined. I am sure that no one would argue that those who drive mini-buses should not be properly paid. What, then, is the great saving?
The proposition which I shall put when we come to this matter on Friday is this. Is it not better that we have consultations and that the local authorities which are working on this and which have asked for more time to prepare their views and representations should be given time to see whether a solution can be found? Or shall we talk about it all day on Friday, and perhaps end up with no Bill at all?
Those are the issues to which we must address ourselves. There is no dispute between us about the problem. The dispute is about how best to solve it. We may need to go much more radically into whether the present licensing system is right. After all, the traffic commissioners scheme was a product of the quite different circumstances of the 1930s. Much more radical consideration may be necessary. Just putting in a few minibuses, in my view, will not solve the problem or make much of a contribution. It could—these are views that I expressed when in opposition—make life more difficult for would-be passengers if the National Bus Company and other operators were to withdraw their few existing services.
The new powers were given to the local authorities by the previous Government only in April. People should be given time—they have had less time than the Government—to look at these problems. Yet hon. Members are now saying. that this is the only way to deal with the matter. It will upset an awful lot of people if the House insists on that view.

Mr. Fox: The Minister is making great play about existing services suffering. Will he confirm that, under the proposals in the Bill, if a mini-bus is being run for commercial reasons the traffic commissioners will still have to approve the running of that mini-bus, and that the only exception will be a private mini-bus run by the WVS, Rotary, Round Table and so on? One can hardly imagine that thousands of private mini-buses will sweep through our rural areas. There will still be safeguards for existing operators. To suggest otherwise is to exaggerate.

Mr. Mulley: I may exaggerate a bit on my side, but there is a bit of exaggeration on the other side about the transformation that the clauses could give to rural transport. They would not. My proposition is that the local authorities, most of them having had these responsibilities only since April, should be allowed to finish their consultations and make their representations, in conjunction with the operators and the unions. This Government have been in power for only four months, and in nearly four years the previous Government did not succeed in solving the problem. I know how difficult it is. In fact, even in the short time between the introduction of their Bill and the amendment in the other place there have been significant differences in the two sets of clauses. Let us wait a little and see whether we can do a bit more than is proposed here. Clearly, the matter will have to be discussed at greater length in Committee.
The other matter which seems to exercise hon. Members' minds is Clause 22—the sleeping policemen or the humps. If the House is suspicious about these powers, there is some attraction in imposing a time limit. Fifteen months may be a little on the short side. A lot of procedure has to be gone through, with objections and so on. In my experience, those 15 months could pass before a hump was actually in the ground.

Mr. Finsberg: May I clarify the point? I meant the operative period from the time it is agreed.

Mr. Mulley: From the time it is agreed, yes. I shall consider it between now and Friday. I am just saying that, since all of us are held responsible for the


enormous casualty figures which the hon. Member for Hampstead brought to our attention, we should consider all the possibilities.
I was pleased to hear the experience of the hon. Member for Beeston (Mr. Lester). He did not put these humps on the private estates for which he had some responsibility just for the fun of it; he did it because he thought that they would do a job.
The road research people claim that the improvements they have made will mean that the humps will have no effect on two-wheelers. We want to check that and other matters. Incidentally, we are meeting motor cyclists' representatives on Thursday to try to deal with their problems, including the question of parking under Clause 7, to which I shall come in a moment. In this context, we just want an experiment. We can find out public reaction only by letting the public use them. If there were a great outcry, no Minister would be so foolish as to persist in having more experiments. The House would not give the necessary new authority for it to be extended on a wider basis. We envisage putting the first one at a point where cars are practically stationary anyway, on coming to a junction.
In this context, the helpful and constructive suggestions of the hon. Member for Beeston will be relevant. The idea is to put them not in the middle of motorways but in areas where signs have not stopped kids being killed in the streets because drivers have not slowed down when approaching serious and often hidden traffic hazards. If they see that there are the so-called sleeping policemen in the road, perhaps they will go round a Z bend a bit more slowly. But before they are contemplated as part of a road safety programme we want to see whether they actually work when used by heavy traffic in ordinary road conditions. It is not possible to do that on private estates or on the limited road surface at the Transport and Road Research Laboratory. I am asking only for experimental powers. If it will help to attach a time limit, I am quite prepared to consider that.
As a Minister, one is rightly attacked for the deaths on the road, but everything that one tries to do that might

appear helpful—seat belts or anything else—is opposed. Often the same people who complain about the casualty figures are the ones who oppose everything one tries to do in an effort to reduce the figures. The public do not just blame Ministers; they blame all Members of Parliament. So I hope that on Friday the Committee will be willing at least to give the scheme a fair run.
The other matter which caused a great deal of trouble and confusion was Clause 7. The hon. Members for Chippenham and for Shipley and a number of other hon. Members raised this matter. The Committee should understand the history of the clause. It was not in the previous Government's Bill, and I confess that I should not have put it in my Bill except that another place had inserted it last time and when it came to the Commons it had been accepted by the then Minister. We have brought forward the ban on parking in a very modified way. It applies only on urban highways. We are giving local authorities wide powers of exemption. Also, incidentally, there is power in the Bill to exempt classes of vehicles. It would be possible to exempt motor cyclists as a class. I should have thought that local authorities, without incurring great expense, could exempt the kind of roads that the hon. Member for Reading, North (Mr. Durant) had in mind in his account of the estates in his constituency.
I think that it would have been wrong to do it in the simple form in which it was first brought to the Commons last time, which was a total ban on any parking on any footways or verges anywhere. I hope that what we have done will be more acceptable. In the previous debates I sensed a fair volume of support on both sides of the House that something on these lines ought to be done, because there is abuse in certain areas. Again, one cannot please everybody all of the time, or even part of the time.
I do not think that anyone has firmly opposed the concept of owner liability for fixed penalty offences outlined in the first five clauses of the Bill. Several hon. Members raised the question of diplomats, but it is not possible to deal with the whole question of diplomatic immunity in a Bill of this sort. The immunity diplomats enjoy is part of an


international system—I had some responsibilities for it in a previous Government in the Foreign and Commonwealth Office, and very tiresome it was—covering all criminal offences. It is not only to fixed parking tickets that diplomatic immunity applies.
There is concern, however, about this aspect because the figures involved are large and it is an area in which diplomatic immunity confronts the public who may not hear of, for example, a minor diplomat being involved in other criminal offences. The latest figures available for 1973 within the Metropolitan Police district—I do not think that it is a serious problem elsewhere—show that 61,600 tickets within the diplomatic category were not proceeded with, which was approximately 10 per cent. of the total of 600,000 for the district as a whole.
It is a serious matter, but this particular aspect of diplomatic immunity cannot be dealt with without raising the wider question of diplomatic immunity as a whole. My experience—I suspect that the position has not changed—was that the majority of members of the diplomatic corps exercised great responsibility and, although they had immunity, did not seek to abuse it, although, admittedly, some diplomats in some embassies seemed to have a very high average score. These matters come within the scope of my right hon. Friend the Foreign and Commonwealth Secretary. If there were some way round the problem I should be happy to consider it, but I do not think that the question of diplomatic privilege can be dealt with in a Bill of this sort.

Mr. Finsberg: Will the Minister consider between now and Friday whether, at the very least, he will look favourably on a suggestion that, where diplomats claim immunity, that fact shall have to be notified to the Foreign and Commonwealth Office by the prosecutor?

Mr. Mulley: I shall certainly take that up with my right hon. Friend, because it is within his area of responsibility, but there is not really in this sense a prosecutor.
I have been asked whether there is a record of convictions in the ordinary sense under the fixed penalty system and what happens in this respect to an owner

of a vehicle whose driver commits an offence. The short answer is that these fixed penalty offences are not endorse-able, and I am advised that the police keep no record of convictions of this sort. Payments of a fixed penalty fine for parking offences, meter offences and the rest are not thought to be convictions in the strict sense. If a vehicle owner lends his vehicle to a friend who does not face his responsibilities, and the owner finds that he has to pay the fine, that would not be held against him in any way if he himself were later involved in a motoring offence.
I think I have dealt with the major points that have arisen, except those concerning the important issues relating to Clause 26 and the schedule—the change of practice with regard to magistrates' powers. It is not proposed that the penalty of imprisonment would not be available for serious traffic offences. It would be for the prosecution in such cases to take them on indictment to a court where imprisonment could be imposed. I know that it is a matter of great controversy. Magistrates, who use the power sparingly, would for the most part do anything to avoid sending people to prison as part of the approach to the penal system adopted by successive Governments.
My advice is that this matter having been carefully considered by successive Home Secretaries and their advisers, we ought to give it a chance to see how it works. I may not persuade hon. Members who hold a contrary view, but the question is bound to be raised on Friday when I hope to be reinforced by my hon Friend the Minister of State at the Home Office, who, no doubt, will be more persuasive than I. It is a non-party point. The clause and the schedule are, I think, identical to those in the previous Government's Bill. I take the point made by the hon. Member for Hampstead that it does not follow from that that the clause is necessarily good, but I should have thought that in this sort of area one would hesitate to argue with views that have been reached by successive Governments who have looked at the matter from different political philosophies. We shall see whether we can reach agreement on Friday.
There remain certain detailed points to be discussed—for example, the point


made by the hon. Member for Hampstead about penalties under Section 42(4), fake coins in meters. The hon. Gentleman suggested that the fine should go up to £200, but I remind him that it is a multiple offence. The £50 is for every occasion that a fake coin is put into a meter so that if someone put in a series of fake coins he could be liable to multiple fines. It is in the discretion of the magistrates—and no one would suggest that it should be removed or diminished—to decide what would be appropriate in a particular set of circumstances.
Much the same discretion will apply to the point raised by the hon. Member for Reading, North about pedestrian crossings and school crossings. I can well imagine, given a similar set of circumstances, that a magistrates' court would take a more serious view of an offence concerning a school crossing than one concerning an ordinary pedestrian crossing, although they are both serious offences.
The hon. Member for Reading, North raised the question of the reduction in the RoSPA grant. I am advised that the transfer of responsibilities to local authorities has been agreed with RoSPA. The society welcomes what is proposed and will continue to play a major part in road safety. I agree with the hon. Member's views in saying how grateful we are for all that the society has done in the past.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:


Broughton, Sir Alfred (Chairman)
Goldring, Mr.


Awdry, Mr.
Horam, Mr.


Callaghan, Mr. Jim
Howell, Mr. Ralph


Carter-Jones. Mr.
Huckfield, Mr. Leslie


Clark, Mr. Alan
Hughes, Mr. Roy


Cohen, Mr.
Le Marchant, Mr.


Dunnett, Mr.
Lester, Mr. Jim


Durant, Mr.
Mulley, Mr.


Finsberg, Mr. Geoffrey
Wise, Mrs.


Fox, Mr.

We would not want it to be otherwise, and we hope that it will continue to play a major rôle in the future.

I have already said that some of my officials are meeting representatives of motorcyclists on Thursday. I hope that we can persuade them that Clause 7, for example, and one or two other matters will not be as difficult for them as they believe.

I am most grateful for all the comments and suggestions that have been made. If I have missed any points, I have no doubt that hon. Members, if their constituency engagements permit, will be here on Friday to remind me of them. I put it sincerely to the Committee that, while I should have preferred a longer debate examining the Bill in depth, the question before us is whether we get a Bill at all. I suggest that it is better to get all the non-controversial material in that we can—even if we have to remove some items—rather than, at the end of the day, to have to start on this road all over again.

Question put and agreed to.

Resolved.
That the Chairman do now report to the House that the Committee recommend that the Road Traffic Bill [Lords] ought to be read a Second time.

Committee rose at twenty minutes past Twelve o'clock.